How Much Does Pandora Pay Artists?By -
Estimated reading time: 5 minutes
It’s probably much less than you think. And if Pandora has its way, that paycheck is about to get even smaller.
Last week, Pandora was given approval to purchase KXMZ-FM, a terrestrial radio station in Rapid City, South Dakota. They are now under a 90-day trial period before the purchase becomes final. Currently, Pandora has millions of online subscribers who create customized stations based on their own music preferences, so their purchase of a small station in a city of 60,000 people may seem like a move backwards, but it’s a strategic move by Pandora to make more money.
Unfortunately, Pandora’s move to line their pockets means a significant pay cut for the artists and songwriters who make Pandora’s business possible.
How Artists Are Paid
The ways that radio and streaming services pay artists are a complicated mess of numbers and percentages, but it all boils down to this: terrestrial radio stations pay a lower rate than internet stations to play the same songs over the internet.
With Pandora’s current rate system, if you are the writer and performer of the song, you will make about $1.30 if your song is played 1000 times. Unless you are Katy Perry or Drake, you probably won’t even make enough money to buy yourself lunch. It would take years for the average independent musician to simply break even on the costs of producing and distributing their music with the payments that are currently made for streaming music.
With their purchase of KXMZ, Pandora will be eligible for the lower rate currently available for terrestrial radio stations. This means they will be paying about a half-million dollars less in royalties to songwriters every year. Pandora’s purchase of KXMZ is great news for Pandora’s stockholders, but no matter which way you look at it, it’s bad news for the artists, performers, and musicians who make business possible for Pandora.
What This Means For Musicians and the Music Industry
In the larger view of Pandora’s profits, the reduced royalty rate is a drop in the bucket. But even a drop makes a ripple in the bigger scheme of what is currently going on in the music industry. Pandora claims that they value the artists who make their company function, but according to the American Society of Composers, Authors, and Producers (ASCAP), their purchase of KXMZ is “a transparent ploy squarely aimed at paying songwriters even less for online music streams.”