Pandora Says Pink Floyd Is Lying About Royalty Cut

REUTERS/Stephen Hird

On Monday, we wrote up Pink Floyd's in-print reunion blasting Pandora's initiative to alter the royalty rate it pays songwriters and accusing the company of sending out misleading information about the effort. 

Now Pandora has responded, sending out the following statement saying they're the ones lying:

We have enormous respect for the members of Pink Floyd, and their amazing artistic contributions. We also respect the genuineness of their opinion.

Unfortunately, they have been given badly misleading information – the result of a well-orchestrated campaign by the RIAA and their lobbying arm to mislead and agitate artists.

A glaring example is the assertion that Pandora supports an “85% artist pay cut." That is simply not true. [emphasis ours]

We never, nor would we ever, support such a thing. In fact, Pandora has suggested solutions that would guarantee no reduction in artist payouts while also nurturing the growth of internet radio -- a medium that is crucial to thousands of independent musicians who don’t enjoy major label support or FM radio exposure. 

This much is true: Pandora is by far the highest paying form of radio in the world and proudly pays both songwriters and performers.

For perspective, to reach the exact same audience, Pandora currently pays over 4.5 times more in total royalties than broadcast radio for the same song.  In fact, at only 7% of U.S. radio listening, Pandora pays more in performance royalties than any other form of radio.

It's not immediately clear where the band's 85% figure comes from – they link to this 2012 post by Register Editor Andrew Orlowsky, and he doesn't cite anyone. (He has not yet responded to our email.) The bill proposed by Pandora and contested by Floyd, the Internet Radio Fairness Act, doesn't mention specific rate levels.

It's also true that as a percentage of its revenue, Pandora's royalty payments are higher than any other platform's (that's why they're trying to get the law changed). 

But Pandora still doesn't address the underlying issue Camper Van Beethoven frontman David Lowery brought up yesterday: a songwriter ends up with paltry returns for their work even if a Pandora user played their song a thousand times. Here's the rate breakdown according to IP lawyer Vanessa Kaster:

$.0019 cents a song (approx.) per play on satellite radio (like SIRIUS XM)$.0019 cents a song (approx.) per play on Pandora$.09 cents a song (approx.) for a permanent download (like iTunes)$.09 cents a song (approx.) for a physical recording (like a CD)$.24 per ringtone.

So if CVB hit "Pictures of Matchstick Men" does literally get played 1,000 times, Lowery would only get $1.90.

Nor does Pandora address Floyd's other contention, that its flyer asking artists to support IRFA is misleading.

We doubt this is the final cut of this dispute.

UPDATE: The musicFIRST coalition says the 85% figure is derived by calculating the reduction in the portion of revenues for royalties Pandora is said to be seeking — 50% to 8%.

A commenter also alerts us to the fact that "Pictures of Matchstick Men" was a poor example since Lowery was not the original songwriter, and the issue in question concerns songwriter, not performer, fees.

View the original article here