By Craig Hubert | Musicians from all walks of life – from Rihanna to Brian Wilson – have banded together in a fight against streaming internet radio service Pandora, singing an open letter criticizing the Internet Radio Fairness Act. The act, which Pandora has been strongly lobbying for, would cut the already miniscule royalties paid to artists each time their song is played on the service. Pandora, who supports the act along with a host of other technology companies, claim it’s unfair that they have to pay slightly steeper rates than satellite radio services. There needs to be a “permanent fix” to the rates or the internet radio industry will collapse, Pandora founder Tim Westergren told the New York Times. “Passage of the I.R.F.A. will mean more jobs in a sustainable industry, more choices for listeners, and more opportunities and revenue for working artists and their record labels.”
Damon Krukowski, a musician and former member of Galaxie 500, contested that last point in an article for Pitchfork yesterday, bringing to light how little revenue artists bring in from streaming services. He uses one of his own songs as an example: “Tugboat,” by Galaxie 500, which was played 7,800 times on Pandora in the first quarter of 2012, according to his BMI royalty check, and earned each of its three songwriters seven cents. He contrasts this with the original release of the song, released by the band as a seven-inch single in 1988, which the band paid $980.22 out of their own pocket to press 1,000 copies, or ninety-eight cents each. Which means that the band earned more on each of those records, which they paid for, then on all the streams from Pandora and Spotify combined this year. He adds that, to add insult to injury, Spotify and Pandora are actually hemorrhaging money at an alarming rate – a combined net loss of $76 million.
So why has it taken artists so long to respond? Well, part of it is possibly the myth that artists can’t bring in revenue from recordings anymore and that touring is the only way for a musician to survive. Artists are finally realizing their music, which forms the backbone of streaming services (there can’t be one without the other), is not valued. It’s about money, and saving fractions of a penny. Maybe the internet radio industry needs to collapse – it doesn’t seem to be making anybody money anyway. The demand for music will always be there, with or without corporations who don’t value it.
Image: DHD Money Gallery/Wikicommons