So you thought musicians and record labels were upset about Pandora’s attitude toward sharing income? In this case, it’s the composer/publisher contingent that feels it’s getting the short end of the stick. One organization believes the exit of Pandora CEO Joe Kennedy offers a chance to make amends.
National Music Publishers’ Association Association President and CEO David Israelite stated, “Pandora’s recent announcement that CEO Joe Kennedy is stepping down and it will begin a search for a successor provides an opportunity for the online music company to mend fences with the songwriting community.”
Israelite added, Songwriting is essential to Pandora’s business model, yet currently they only pay approximately four percent of their revenue to the songwriters who create the music that listeners enjoy. Pandora is suing to reduce that four percent to an ever lower amount. This compares to the roughly 50 percent Pandora pays to record labels and artists. The four percent Pandora pays is unfair and must change. In other areas of the music business, songwriters and music publishers often earn the same amount that is paid to record labels and artists.
In conclusion, Israelite stated, “I wish Mr. Kennedy the best, but a new CEO could go a long way toward creating a true business partnership with the music industry by addressing this issue and respecting the contribution of songwriters.”
RBR-TVBR observation: Making amends is a nice sentiment, but we sincerely doubt that this will be the catalyst.
NMPA takes Pandora to task for paying labels/artists 50% while songwriters/publishers only get 4%, but it’s not like Pandora is thrilled to be paying artists/labels that much and happily snubs the composers in order to do so.
No, we’re sure that Pandora wants to keep its costs as low as possible period – we are certain it would prefer to reduce what it pays to artists, probably while holding the line on any other associated costs. And that isn’t likely to change no matter who steps into the CEO slot.
The bottom line is that we are looking at a pie which the internet impacted two ways: It decreased its size, and at the same time it increased the number of players with forks who want a piece.
In short, this is a tangled mess, and both congressional judiciary committees have stated their intention to wade into it this year. Stay tuned.