How Artists Can Maximize Their Music With Pandora
Producer/songwriter Cliff Goldmacher was only half joking when he summed up today’s streaming music royalty landscape: “For lack of a better way to put it, it’s kind of the wild west out there right now.”
Goldmacher, chatting onstage with Pandora Director of Artist Marketing Jason Feinberg, hosted the San Francisco Chapter’s “Maximizing Music With Pandora” event, held April 6 at The Chapel in San Francisco’s Mission District, sponsored by Michael Romanowski Mastering/Coast Recorders and KIND Bars.
Earnings were certainly top-of-mind for the more than 100 Bay Area music makers who turned out to kick off the Chapter’s Music Business Night School professional development series, which take place on four consecutive Monday nights this April.
The relationship between music makers and streaming services has been complex and often contentious, but tonight’s conversation focused on the practical: How to maximize your earnings with Pandora. And as we learned, artists have more opportunities than they think.
The Pandora Backstory
Music streaming services fall into three categories: Download services, such as iTunes; interactive services, such as Spotify; and non-interactive services, like Pandora, which let listeners steer their own experience but place limitations on playback.
Pandora is truly massive in scale, reaching 81 million unique users in the U.S., Australia, and New Zealand. Listeners log more than 1.8 billion hours each month, averaging 20 total hours; more than 7 billion stations have been created around artists, songs, and genres.
Pandora curates music through complex algorithms and musicologists who define more than 450 song attributes, from “big-picture” elements such as genre, style, tempo, and instrumentation to deeper categories such as “vocal dominance range.” “The goal is to create unique experiences for individual musical tastes,” said Feinberg.
Listener feedback (thumbs up, thumbs down, skips, etc.) affects a song’s performance on Pandora. With 50 million pieces of feedback, “we understand sentiment about music,” said Feinberg. “We really understand songs people like, the artists they like, things they don’t like.”
Indie musicians sometimes assume that there are a lot of barriers to getting their music onto Pandora, but as Feinberg explained, the service welcomes submissions from every artist in every genre, and the submission process is very simple. “We have a process called Indie Submissions where anyone, regardless of their situation with a label, distributor, or service can submit. Go to submit.pandora.com and sign up.”
Plays, Payments And Pros
Getting music on Pandora is straightforward. But when it comes to figuring out pay structure, things start to get a little nebulous.
Understanding royalty payouts begins with understanding the roles of the performance rights organizations. Goldmacher spent a few minutes reviewing SoundExchange, an organization that collects royalties for artists and owners of a recording (labels, anyone who owns a master), and the traditional performance rights organizations—ASCAP, BMI, and SESAC—which collect royalties for songwriters and composers.
Goldmacher stressed the importance of making a distinction between terrestrial radio, which does not pay performers for airplay, and Pandora, which by paying SoundExchange, pays performers as well as the songwriters and composers who are getting payments from PROs.
“Registering with SoundExchange is essential,” said Goldmacher. “If you are an artist with music streaming out there, there’s money waiting for you.” Goldmacher added that it’s in the best interest of any songwriter, “as someone who puts intellectual property into the world,” to register with a traditional PRO.
The conversation moved on to specifics: Goldmacher requested specific figures regarding Pandora’s royalty structure, and Feinberg answered that ASCAP gets 1.85 percent and BMI gets 1.75 percent. “These are set by the rate boards and the amount we pay is tied to revenue,” explained Feinberg. “So as revenue goes up, so do payouts.”
Goldmacher added that according to his research, as far as percentages of payments, a Sound Exchange payment for a featured artist is 45 percent; a non-featured artist receives 5 percent, and the owner of the master receives 50 percent.
But how are producers, engineers, and remixers compensated? Traditionally, they have negotiated flat fees or points; but Goldmacher explained that under the Allocation for Music Producers Act just introduced on Capitol Hill, an artist will be able to create a letter of direction that carves out a percentage of the artist allocated royalties for the producer. “It’s all new technology, evolving before our eyes,” said Goldmacher. “And this AMP bill is just another indication that things are progressing and that people who have made the effort to put these recordings into the world are being compensated.”
Goldmacher then addressed an elephant in the room: In the past, Pandora has lobbied to pass legislation to lower rate standards paid to rights holders, as part of the Internet Radio Fairness Act (which was later dropped). Does Pandora feel that rates paid to artists are too high?
“The challenge the industry faces is finding a sustainable business model—one that is fair to artists, and provides a service that listeners value,” said Feinberg, who added that Pandora has contributed more than $1 billion to music makers — “more than half of our revenue.”
Goldmacher noted that it’s common to hear music makers complaining about low rates on Pandora, but Pandora answers that a “spin” on its service reaches one person, which doesn’t equate to a spin on FM radio, where one spin reaches a large number of listeners.
“Unfortunately, it’s not apples to apples,” replied Feinberg. “Payouts are a function of revenues; with that, it’s a variable formula.” Feinberg went on to offer one specific figure: “We predict to pay about $1,650 for a million spins to music makers, including performer and songwriter.”
Marketing Techniques That Make Money
Then came the part that artists were waiting for: Feinberg went into Pandora earning opportunities that go beyond streaming payouts.
First up: translating streams to sales. “We are tremendous traffic drivers to iTunes,” said Feinberg. “Smaller artists still question whether iTunes is right for them; certain artists look at Bandcamp and CD Baby, and it certainly makes sense to be where your audience is, but from our perspective, we do drive a lot of traffic to iTunes, so if you are on Pandora, being on iTunes as well gives you just another option for revenue generation off of our platform.”
Feinberg and his team use Pandora’s vast audience data to develop marketing tools and insights that that allow artists to better reach their audience, and better understand their behavior.
Specifically, Pandora’s Artist Marketing Platform (AMP), launched last October, provides a dashboard of data in categories including all-time spins, listeners, stations created, listener demographics (gender/age breakdown, etc.), and a “heat map” that graphs audience activity geographically across the U.S.
“We offer a breakdown of people who have created stations of your music as artist or song; artist managers have changed tour routes because of it,” Feinberg explained, adding that data about top tracks and thumb ratios can help artists determine how to sequence their set list, for example, or which single to drop next. The information is also useful for planning CD releases and social media campaigns. “It gives you a sense of what your fans like. And it’s not just anecdotal.”
Pandora’s Artist Audio Messaging feature, currently in beta testing, will give artists the ability to record an audio message, similar to a radio drop, that can be attached to tracks or specific moments on their radio stations: Calls to action can include asking fans to pre-order a record, or offering merch, concert tickets, and direct-to-fan packages.
“It’s critical that we get it right for the listeners,” explained Feinberg. “We want to ensure that they have a great experience. If we can combine that with giving artists more avenues to reach those listeners, it’s a tremendous opportunity for everyone.”