Statement from David Israelite, NMPA President and CEO: Pandora Fuels Its Own Misinformation Campaign

June 27, 2013


Statement from David Israelite, NMPA President and CEO on Pandora's Misinformation Campaign

Yesterday, Pandora CEO Tim Westergren posted a blog on the Pandora website defending himself from the avalanche of artist and songwriter complaints regarding Pandora’s efforts to slash payments to the very creators that make Pandora possible. Mr. Westergren’s post could not be more wrong or misleading.

Put simply, Pandora has gone to war against creators of music.  For years, they’ve funded a well-orchestrated campaign to lower the amount paid to songwriters and artists.  The facts speak for themselves.

  • In 2009, Pandora entered into a settlement agreement with SoundExchange for royalties  paid to artists, only to run to Congress a few years later arguing the rates it agreed to were too high.  Pandora asked Congress to undo the agreement and lower its royalty rates.
  • In November 2012, Pandora sued ASCAP to further lower the already paltry rate (only 4% of revenue) it pays to music publishers and songwriters.
  • Pandora continues to complain that music publishers and songwriters should not be able to negotiate “free-market” rates and instead remain subject to consent decrees that keep rates below-market  levels.

Meanwhile, Pandora uses the artists’ and songwriters’ creative content to grow its business and pay its executives millions of dollars.  That NMPA, RIAA, ASCAP, BMI along with hundreds of artists and songwriters have finally started to speak out is attributable only to Pandora’s continued actions against our industry.

With respect to songwriters, the low royalty rates Pandora pays are real.  Per stream numbers recently in the press were determined by reviewing royalty statements, Pandora filings and other documents.  None of this is referenced in Westergren’s blog post.

Last year, NMPA held a songwriter event at which we demonstrated how five hit-making, successful songwriters were paid minimally for millions of plays on Pandora.  In the first three months of 2012, five of their hits – arguably the most popular song written by each of them -- streamed 33 million times on Pandora.  Yet these songwriters received a combined total of $587.39 for those streams.  Even using data provided by Westergren’s “independent blogger”, songwriter and music publisher interests received only $97 for one million streams of a song. By any standard, this is unacceptable.

Westergren says that through Pandora he sees, “a future that allows tens of thousands of working musicians to finally reach the audiences they deserve.” But, due to low royalties paid by online music giants like Pandora, songwriters and artists can’t make a living despite reaching their audience.

While Pandora wages war on creators, other digital music services are entering into voluntary agreements with the music industry. I think we can all agree that digital music services are an increasingly important and significant part of the music industry.  However, without the payment of fair royalty rates to songwriters and artists, music services like Pandora will make it impossible for them to make a sustainable living from their creative work.