Pandora says that it’s now paid $1.2bn to music rightsholders – with $439m shelled out in 2014 alone.
That’s according to the digital radio station’s chairman and CEO Brian McAndrews (pictured) who told investors last night: “Bottom line: in an industry historically described as challenging in some circles, in 2014 we delivered profitability for ourselves and our shareholders, while also paying more than $439 million back to rights holders, now accumulatively more than $1.2 billion. This is proof that we can create a win-win music economy for all involved.”
That’s gross profit he’s talking about – because Pandora lost more than $30m in 2014 in terms of net income.
The platform has long been locked in a battle with artists and, especially, songwriters over its royalty payouts.
In 2012, more than 120 high-profile artists and songwriters signed a petition against the company’s attempt to push the ‘Internet Fairness Act’ through Congress, which would result in it paying a smaller percentage of royalties to creatives through SoundExchange licensing.
Yet in March last year, the ASCAP rate court has ruled that Pandora needed to give just 1.85% of its annual revenue to the PRO and its members for the next five years.
“We believe our future will include more direct licensing arrangement with an expanded group of copyright holders”
brian mcandrews, pandora
Sony ATV boss Martin Bandier called the result “woefully inadequate” and a “clear defeat for songwriters” and vowed to push for reform in the rate court mechanism in the US.
In June 2014, the US Department Of Justice commenced a review of the ‘consent decrees’ of BMI and ASCAP after Sony/ATV, Universal Music Publishing, Kobalt and others moved to withdraw certain negotiating rights concerning digital radio from the two collection bodies. The publishers feel that by negotiating direct with the likes of Pandora, they can get their writers a better deal.
McAndrews indicated that Pandora was keen on the idea of more direct licensing deals with publishers, commenting: “We believe our future will include more direct licensing arrangements to the expanded group of copyright holders and we will make significant efforts to 2015 to pursue win-win licensing arrangements and lay the ground work for more in the future.”
He talked up Pandora’s Artist Marketing Platform (AMP), which he said gave “artists and mangers access to incredibly valuable data driven insights from Pandora’s 80 million plus listeners. Enthusiastic response demonstrates the hunger for data and the attractiveness of Pandora’s scale. We are now eager to take it to the next level, applying promotional capabilities to allow artists to connect with their listeners in ways that only the technology data and scale of Pandora made possible.”
He said AMP “demonstrates our genuine desire and ability to collaborate within the music industry to build mutually beneficial partnerships. We are working hard to make this succeed to expand the depth of our industry relationships”
Other choice quotes from BRIAN McAndrews, Pandora CEO:
- “We also are excited by our unique opportunity to be an indispensable partner to music makers. In addition to being the highest paying form of radio to artist and writers and growing, Pandora also has proven promotional impact, helping generate additional revenue for artists and writers off of our platform. In 2015 we will continue our investments designed to further connect our 80 plus million listeners with their favorite artist and vice versa.”
- “The launch of the artist marketing platform was an important milestone for Pandora and its been very well received by the industry, providing music makers with unprecedented data and information to strengthen their connection with the band, but it is just the beginning. In 2015 we will invest heavily in the further development of AMP and other initiatives designed to serve the music community and you will see us working collaboratively with the industry to build and straighten partnerships at mutual benefit. “
- “We have thousands of artists and representatives that claim their identity and are logging in regularly and using the date to help their careers and the management, so we continue to see momentum there, but as I think I mentioned in my remarks we also are going to go the next phase which involves more promotional elements than allowing people to reach out to listeners on a direct basis and connect better with listeners. So we continue to see momentum there and that seems to be very well received in the industry.”
Music Business Worldwide
