Pharrell Made Only $2,700 In Songwriter Royalties From 43 Million Plays Of ‘Happy’ On Pandora | Business Insider

Authored by kolumnmagazine.com and submitted by PalmTreeDeprived

This past year was great for singer Pharrell Williams. His song “Happy” secured him Grammy nominations for Best Music Video and Best Pop Solo Performance.

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Despite Pharrell’s ubiquity, “Happy” made $2,700 in publisher and songwriter royalties from 43 million Pandora streams in the first quarter of 2014, according to an email from music publisher Sony/ATV CEO Marty Bandier obtained by Digital Music News.

In the letter, Bandier said a million streams of a song on Pandora yields roughly just $60 in royalties. “This is a totally unacceptable situation and one that cannot be allowed to continue,” Bandier wrote.

ate_the_wh0le_thing on January 26th, 2020 at 02:25 UTC »

From the original 2014 Business Insider article that is cited, Pandora's Director of Public Affairs Dave Grimaldi respondeded to Sony/ATV CEO Marty Bandier's statement that music streaming services are harming income to artists:

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However, we wish Mr. Bandier would provide the proper context and facts. Pandora is already the highest paying form of radio to both performers and songwriters. We have paid more than $1 billion to rights holders since our inception, which amounts to over half of all revenue we have generated. Regarding the specific songs he mentions in his letter, Pandora paid all rights holders more than $150,000 in just three months, substantially more than the $6,100 he suggests. 

The issue is not whether Pandora pays enough in royalties.  The real issue is the financial dispute between labels and publishers about how to divide Pandora's industry-leading royalties.  Mr. Bandier and his label peers (many of whom work within the same companies) are free to decide amongst themselves to change the split between songwriters and performing artists of the substantial royalty revenue already paid by Pandora.  We'd also encourage that same group to provide transparency about how those dollars flow to the artists and songwriters.

PAJW on January 26th, 2020 at 01:50 UTC »

There's another part to this story. In 2012, Pandora paid 63% of its revenue to artists and songwriters as royalties, and lost $38 million. Pandora continuously has been a money-loser, because its advertising revenue from its free tier has not been enough to pay for its royalties plus its operations.

The performance royalty is far higher than the songwriter's royalty. The performance royalty is 0.19 cents per play, so about $85,000 in performance royalties from this one song.

For what it's worth, the songwriter royalty will go up 44% by 2022 after a 2018 ruling from the Copyright Royalty Board, and this is a percentage of revenue. So if you're a Pandora Plus member, 15% of that goes to songwriters even if you never personally stream a song.

As with any business, If the cost of music rights go too high, the streamers will go out of business (except those like Apple Music which have the resources of one of the world's largest companies backing them)

Mudder1310 on January 26th, 2020 at 00:11 UTC »

David Crosby wrote a terrific and eye opening article about what digital music companies pay artists: it’s way way less than you’d think.

Edited to add link. https://musically.com/2018/08/06/david-crosby-promises-real-numbers-on-streaming-royalties/