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October 10, 2012

Artists are Being Paid How Much by Pandora?

By Jamie Epstein, TMCnet Web Editor

For those of you who may think Pandora (News - Alert) is just a girly charm bracelet or a magical chest, you are missing out on a great Internet music streaming service that is free in its most basic version and allow users to create their own music channels based upon their favorite artists, bands or genres. My personal most-loved feature about this site is the ability to skip past songs that don’t appeal to you.

Have you ever sat back and thought about what the artists that are featured on this service think about the public being able to access their music for free? My guess is that they are actually pretty fond of it, considering Pandora’s founder Tim Westergren recently revealed that he dishes out almost $3 million annually to these signing musicians.

He added in a statement, “For over two thousand artists, Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we’ll pay over $50,000, more than the income of the average American household. We’re talking here about the very real possibility of creating, for the first time ever, an actual musicians middle class.” 

Image via Shutterstock

Looking at specific artists pay checks, beloved Adele, Coldplay, Jason Aldean and Wiz Khalifa rake in nearly $1 million each a year while my personal faves Drizzy Drake and Lil Wayne receive approximately $3 million.

Although the company obviously believes it is these artists’ rights to be paid when their music is listened to, exactly how much money each receives is still under debate. In fact, just last month Pandora voiced its support for the Radio Fairness Act, legislation that if passed would enable the company to cut back on the royalties it dolls out.

“It’s hard to look at these numbers and not see that internet radio presents an incredible opportunity to build a better future for artists. Not only is it bringing tens of millions of listeners back to music, across hundreds of genres, but it is also enabling musicians to earn a living. It’s also hard to look at these numbers, knowing Pandora accounts for just 6.5 percent of radio listening in the U.S., and not come away thinking something is wrong,” company officials stated.

Last month, TMCnet reported that Apple (News - Alert) has been involved in heated discussions with big time music labels that would enable the company to license music for a streaming radio service that would directly compete with Pandora. The new radio service would be available via any Apple devices but would completely exclude Android (News - Alert) devices.

According to Michael Pachter, an analyst at Wedbush Securities, “What’s in this for Apple? Pandora already does a great job, so does iHeartRadio, so does Why do we need another one?”

I guess we will have to wait and see how newly introduced music services affect Pandora’s customer base but rest assured in the meantime that your favorite bands and singers are getting paid more than their fair share.

Edited by Rachel Ramsey
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