Remember that post from David Lowery about Pandora rates?
Here’s a reply from Michael Degusta, doing what everyone that linked to the original story (including me) should have done and double-checking the maths (with an S please, people!).
His calculations and research tells us what Lowery’s song made in total from Pandora, including a performance royalty that Lowery mentioned in passing but said he’d post about later. In doing so, Degusta makes the argument that Lowery’s total take for the song was more like $230 than $16.89:
Conclusion. By this math:
Pandora paid a total of about $1,370.
The band received a total of about $585.
If Lowery received 40% of the performance royalty, “all he got” for the 1 million plays was in fact around $234.
Whatever one thinks of the fairness of those numbers, they’re all clearly far larger than $16.89.
It’s inflammatory stuff but it’s just as misleading as it claims Lowery was – Degusta’s basing his total on figures that include the performer royalty as well, but if you go back and read the original blog that everyone picked up on, Lowery’s complaint focusses on the songwriter’s royalty. Lowery does mention the performance royalty and clearly states he’ll talk about that separately, and if you go through the comments he repeats that this was his angle, how much a songwriter makes from Pandora.
But Degusta also examines Lowery’s Pandora and US FM/AM radio comparisons:
The main issue here is that Lowery cites only dollar amounts for comparison:
• “For frame of reference compare [sic] Sirius XM paid me $181”
• “Terrestrial (FM/AM) radio US paid me $1,522”
This is quite simple: those sources paid him a lot more primarily because a lot more people heard his song via those sources. For example, AM/FM paid him $1,373.78 for 18,797 spins. That’s 7.3 cents per spin. If only 10,000 listeners heard each spin, terrestrial radio is in fact paying just half the songwriter fee Pandora paid him per listener. And of course it’s likely to have been far more than 10,000 – even the intentionally miniscule South Dakota radio station Pandora just bought manages to average 18,000 listeners.
None of this means Pandora ought to pay less in royalties. … But attacking Pandora with intentionally misleading statistics just undermines the credibility of the argument.
It seems to me a little cheeky to end like that when the basis of his own attention-grabbing headline merges performer and songwriting royalties while Lowery sought only to examine the latter.
Finally, Pandora themselves have pitched in.
I can see what Lowery’s point is about songwriting not paying so well, but he made some poor comparisons to other royalties that didn’t help his case. And when Degusta provided those eye-opening (but in my view beside-the-point) performance royalty estimates, along with ably debunking the radio comparison, the combination further distracted everyone from Lowery’s original point.
I think all we can take away from this is that working out balanced royalties in this new digital age is not easy, and making a living in music is a gamble.
(Via Daring Fireball)