The Founder Of Pandora Calls For A Revising Of The Percentage Of Royalties Paid By Internet Radio Stations

Westergren reveals the juicy income received from the company by artists such as Drake, Ellie Goulding and Bon Iver

Tim Westergren, founder of the online radio station Pandora, has posted a letter on its official website in which he offers a bit of information about his company as a source of income for artists. For example, French Montana, although it ranks number 17,000 at Amazon in sales, will be paid about 138,567 dollars by Pandora at the end of this year, a figure very close to what Bon Iver will receive from the same company under the concept of royalties. Depending on the popularity of each band, this income can rise drastically. Thanks to Pandora, Ellie Goulding will earn over 600,000 dollars and Mumford & Sons will make more than 500,000. Those at the top of the chain are Drake and Lil Wayne, who are raking in close to three million dollars annually each. But the most surprising thing about these figures is that Pandora only attracts 6.5% of radio listens in the United States. For this reason, Westergren is of the opinion that although he wants to continue to support artists, the situation isn’t entirely fair, as online radio pays more in royalties than digital radio (what we understand here as conventional radio). This is such a disadvantageous situation that the main companies in the online sector, AOL, Yahoo! LaunchCast and MSN, have chosen to leave this business area. Westergren believes that, under the current conditions, Internet radio isn’t a sustainable industry. Therefore, given the importance of this type of channel for supporting and spreading musicians’ careers - not only through royalties, but also in terms of encouraging consumers to buy more music - he thinks that the percentages of royalties paid by services such as Pandora should be lowered. In the long run, this would favour the sector, as it would allow for growth, and therefore the artists would end up increasing their income from this source. It’s not the first time that this issue has been raised, nor will it be the last. The debate is on.

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