Pandora Reveals Artist Royalty Rates

Small artists are earning big payouts from the streaming service, but its founder wants to pay less. Can a career be built on internet radio?

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Pandora has hit back at critics who say the streaming service pays too little to artists by revealing the huge figures it intends to pay out over the next 12 months.

Founder Tim Westergren wrote a blog post that reveals it will pay more than $10,000 each to more than 2,000 artists and over $50,000 each to 800 artists.

"For top earners like Coldplay, Adele, Wiz Khalifa, Jason Aldean and others Pandora is already paying over $1 million each. Drake and Lil Wayne are fast approaching a $3 million annual rate each," he wrote.

However, the amount artists ultimately receive will depends on their record deals. It will first be paid to the label, who will pass on the artist's rate as agreed in their contracts.

Westergren sees internet radio as a big opportunity for artists, and says the additional income can help them build a career:

"I remember the many years I spent in a band when earning an additional thousand dollars a month would have been the difference between making music an avocation and a hobby. We're talking here about the very real possibility of creating, for the first time ever, an actual musicians middle class."

However, he goes on to say that the licensing fee set by the RIAA and their lobbyists ten years ago has "devastated" internet radio, suggesting he'd rather pay less to artists after all.

Do you think streaming could replace traditional purchases as the main source of income for artists? Let us know your view in the comments.

42 comments sorted by best / new / date

    If youtubers can make a good living, then I dont see why you cant do the same with streaming music.
    Im simply asking, but do people acutally make a living creating videos for youtube?
    Yes. In fact, one of my schoolmates has given fashion advise on youtube for a about 3 years now, and has gotten to the point where companies contact her, send her clothes, and pay her to model them on youtube.
    Yes. My friend does a lot of metal versions of video game music and has 1+ million views and gets royalty checks. How this works, I don't know, but whatever he's doing, he's doing something right.
    The bearded one from Epic Meal Time actually quitted his job as a teacher to focus on the show.
    I do regular video game commentary on Youtube, and I get enough money to live comfortably off.
    good God really? just commenting on video games? And that alone is enough to make a living? Really?- gas, groceries, house payment/apt. rent, etc.? Damn I need to make more youtube videos
    it's mostly luck that your videos get noticed and if just one video of yours gets noticed and attracts say a million views from blogs, whether it be mostly liked or disliked, you will get noticed...of course people doing stupid things and acting like idiots in their vids gets views for some ass backwards reason) even if one person does something simple like video game commentary, song covers or whatever and they get noticed by YT, yet a thousand others can be doing the same type of videos (and alot better than the person who was noticed), it will all come down to how well you can advertise (or spam advertise) your videos and by the luck of who and what blogs noticed it because of their advertising...just look how much blogging can attract the masses YT will give you royalty checks just because of how much advertising was advertised by the views of your's a basic business principle. However, dont let it deceive you into thinking you can make a life long living or be a millionaire, because it's very rare and depends on what exactly your videos are about, and there's a big difference when it comes between fad-following comedy/entertainment videos and videos that help promote things like research and economic and business growth, or they offer informative help with products, etc, there's articles out there that tell you all about it
    No, not just commenting. I make gameplay videos, sometimes to show off, sometimes to review new patch content or new games, while I comment. I had to make a lot of videos before I started getting noticed enough, and it helps if the game is popular and you're good at it, but yeah, I make enough for all apartment-related expenses, food, and then some (guitar rigs!).
    I think this is great, in a sense. I mean, it will still be major artists getting all the money as it has always been, but I think its great of Pandora to do. If they could start with the same process on Youtube, artists could make some serious money down the line.
    They probably have 62 computers set up in their office playing their radio on repeat. Cha ching!
    "However, the amount artists ultimately receive will depends on their record deals. It will first be paid to the label, who will pass on the artist's rate as agreed in their contracts." So basically they'll be making jack-shit.
    I think its kind of funny how a lot of people criticize the record industry for taking all of the artists money. A big reason why the artists make crap pay is because they do the most god awfully stupid things. I'm working at WBR's A&R admin department and see some of the things they do. Most of the time they don't read the contracts they are agreeing to and end up getting screwed over. If they actually read it they could change some things for their favor. Some other things include when they get money to do things like photo shoots, they get a big check that is FOR THE SHOOT not for them to have wild parties thinking the record company pays for. They try to send in the bills to get the company to pay for it, but they ultimately have to pay for damages, alcohol themselves and it comes out of their pay check. Also, a lot of artists still make a lot of money anyway. TL;DR artists are SOMETIMES dumb and don't read contracts,and blow away their money
    Perhaps, but that would be the fault of the record label and to an extent the band depending on how involved they were with the singing of their contract.
    In other words everything is still the same... the top few pop acts with the most major label backing make the most money and everyone else fights over scraps.
    wtf Lil Wayne gets about 3 million/year?
    That's weird. I thought they were paying 'artists'. Since when does Lil Wayne fit in that category
    "suggesting he'd rather pay less to artists after all." Because, after all, album sales are booming and artists are making shit-tons of music in royalties. (said sarcasticly)
    I havent listend to Pandora in weeks but I go on youtube for music constantly and found and liked more bands than I ever would on pandora.I dont see them getting any bigger.But im probably wrong.
    This makes me glad, there is nothing I want more than for musicians to earn an honest buck.
    so 2800 artists out of hundreds of thousands get any significant royalties. sounds pretty 1%ish to me.
    So use Pandora to listen to the rest more often. It's play-count-based; that's why the more popular artists are receiving more royalties. They get listened to more often, so they get more money.
    That's actually not completely correct. The reason the bigger artists get more is that their record labels make Pandora pay more to get them on there. Independent artists get almost nothing. Each spin is worth such a small fraction of a cent to an independent artist that mathematically, it rounds down to zero. So unless you get a ton of plays, it's hopeless. And even if you do, it's still almost nothing. I'm not on Pandora, but I know musicians who are and they can get Tens of Thousands of spins and only make a couple hundred bucks or so. Spotify is the same way. My music is on there, and if I didn't need the exposure (Still early in my career), I wouldn't use it at all. By the way, for both of these online services, the Independent rate is set, but for record labels, the deals are made on an individual basis and are kept confidential, so there's no way of really knowing what Big Label artists are actually making.
    Sounds like capitalism to me. If you don't like it try to convince people of why the system is bad rather than merely pointing out that it is bad. Social change doesn't just happen.
    This is not even CLOSE to the idea of the 1%...that refers to poor people suffering because all the wealth is distributed to the 1%, NOT to millions of *****s playing shitty music and not being paid as well as Coldplay.
    Thank you for putting forth such a compelling argument. Please, for the love of god, stop. You're just as bad as Lil Wayne fans.
    Seems to me like the record labels are still robbing artists at the source regardless of what the streaming companies are paying. I don't claim to know all the ins and outs but I would imagine that the label is paid the revenue generated by the intellectual property and the artist is given a "cut". Personally I think it should be the other way around, the artist should be paid for their work and the record label should be given a cut. Unfortunately the fact of the matter is that unless you're Metallica and you're loaded you need the record label for financial security.
    streaming is a lot easier anyways, especially for people like me. I work nights so i have no time to go to the store and buy a cd, just buy my songs online
    Was this an issue with radio? If no, please explain to me why this is an issue today?
    It was, and still is. Although royalties are paid now, here in the US there is still lobbying and debate over the standard of pay. There is a royalty payment for the recording, and one for the songwriter. Everywhere else in the world, there is a payment for the recording, the songwriter, AND the performing artist. We're trying to get that instituted here as well. Musicians need better representation in Congress. The big problem is, most people don't realize that most musicans are blue collar, middle class or below type folks. They view all musicians as the big, famous, rich people they see on TV or in magazines. I would encourage any musician or music fan to write their Congressman or Congresswoman and let them know how important musician representation in our Congress is to them.
    thats just sad when these artists make millions of dollars a year. i don't see led zeppelin, pink floyd, hendrix, santana, aerosmith, cream, sabbath, frampton or any real artists or musicians up there. Real artists with real passion, art, soul, talent, and creativity are so overlooked and put down by todays society it is sad. but all these talentless, auto tuned, money hungry fakers get fame and fortune. plain out idiotic if you ask me yourself.
    I think they've made their millions. It's time to let a new generation create some classics.
    i highly agree with this for artists who have talent nowadays, but sadly about 90% of musicians nowadays are all computer altered. No passion, feeling, art, talent, creativity or emotion.Yes, There are bands around now who deserve the respect for being talented, artistic and passionate like real musicians used to be. Although there are some, Very few artists nowadays are recognized for that. And the ones that are talented and signed are mostly hidden away by the wannabee fakes like Lil Wayne, Drake, Beiber, Lady Gaga, Skrillex etc... But people like this, who get the most attention from our society, don't deserve any of the millions their making, and they just ruin the chance for real artists and musicians. They're in the business purely to make money and be famous, where it should be because you love music and you want to express your feelings and your emotions through instruments and vocals. not auto tunes and beatmakers. I don't really care about the money, it's the point behind the music. I'm just saying that it really sucks when real talented musicians are overlooked nowadays for the shitty autotune computer generated crap people call music.
    When has the music industry not been corporate bullshit? That's just the world we live. I think we as musicians try to tell ourselves there's a real future in music and that it actually is the purest form of expression but there's no hope for the industry and there never has been. Any form of art that relies on other people's support simply cannot dominate the culture like it appears. With Led Zeppelin and Pink Floyd and u2 and all these other bands, they just were doing it right before they had the obstacles we have now, which pretty much eliminate the majority of all possibilities for doing music the classic way.
    In my opinion it is rediculous for Pandora to have to pay that amount. Artists should be happy that Pandora is getting them fans that they would otherwise not have if not for Pandora. I have found many great bands through Pandora because of this fact. How is radio any different from pandora? The only difference between Pandora and Radio is that Pandora plays a bad song every once in a while, while radio does it pretty much all the time. Artists should be truly thankful for to be heard and FOUND. It isnt like Pandora is playing their whole library of songs back to back.