Pandora CFO: "We'd Like To See Artists Get Paid More"
October 15, 2013
Earlier this month, Pandora released its listening metrics, and the numbers for the popular streaming music service are huge. Pandora reported 1.36 billion listening hours in August 2013, and active listeners to the service totaled 72.7 million in September 2013, marking a 25 percent jump from September of last year. Now Pandora is facing competition from iTunes Radio, which notched more than 11 million unique listeners in its first five days after launching. In a new interview published by CNet, Pandora CFO Mike Herring said that while iRadio is a worthy opponent, it's still a very different animal from Pandora.
"We absolutely see iTunes as a competitive option out there, but we think we are a great service that does this better than anybody else," Herring told CNet. "The most recent entrants [to the Internet radio business] have all been large, well-funded companies that have agendas outside a really awesome music experience. They have other reasons, selling cell phones or downloads. We sell downloads, but the priority isn't to sell as many downloads as possible. It's emblematic of the difference."
Herring also addressed the misconception that Pandora is trying to pay artists less royalties, and he said opposition to Pandora is borne out of years of decline in the music business.
"We've put offers on the table where we commit to paying no less than we pay now in absolute dollars, and with increases on an annual basis. That hasn't gone anywhere because of a lack of trust," Herring explained. "It has created a situation where meaningful conversations for positive outcomes are going to be hard-fought wins... One of the arguments against Pandora is that we're trying to pay artists less money. We'd like to see artists get paid more. We also understand the mistrust comes from a pretty tough decade-plus in the music industry. First you had the piracy issues, which are still rampant, mostly internationally but also domestically. And you had the download platforms, specifically iTunes, that disintegrated the entire CD business, which was detrimental. There's difficulty for people who have experienced these negative things to listen to reason. We write a big royalty check every year to performers; last year we wrote one for $250 million in performance royalties. That's one fourth of all royalties paid to performers globally by radio. But we have only about 7 percent of the U.S. radio market. The point we like to make, we are paying a pretty large amount to performers, even though it gets pitched often that we're underpaying or not paying our fair share."
Visit this link to read FMQB's own interview with Tommy Page, Head of Music Partnerships at Pandora, who discusses many of the goals, accomplishments and challenges facing the streaming music service.