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Pandora Details How Much It Pays Artists

Company exec Westergren says it is creating a ‘musicians’ middle class’

Pandora has said it’s paying more than 50% of its revenues in music royalties and now Founder and Chief Strategy Officer Tim Westergren details how much the Internet audio service is paying artists.

That’s important as Pandora has become a target of some of the advocacy groups that oppose the recently-introduced Internet Radio Fairness Act, which seeks to level the playing field for music royalties among streamed digital audio services.

In his blog, Westergren writes about the artists that receive a steady income from Pandora. The Internet audio service will pay $10,000 each to more than 2,000 artists over the next 12 months. Pandora will pay some 800 artists over $50,000 while top earners, Like Adele or Coldplay, are paid over $1 million each.

That revenue stream is meaningful, according to Westergren, who spent many years in a band, “when earning an additional thousand dollars a month would have been the difference between making music an avocation and a hobby.”

Westergren says: “We’re talking here about the very real possibility of creating, for the first time ever, an actual musicians’ middle class.” Internet radio presents an incredible opportunity to build a better future for artists, according to the company leader.

The musicFirst coalition, which is backed by record labels, opposes the act and says Pandora is taking money out of artists’ pockets by backing the measure.

Pandora is trying to lower what it calls its “predatory” music licensing fees, rates which it says were orchestrated by the record labels and their Washington lobbyists that have “devastated” Internet radio.

Because of those high fees, “Few now deem [streaming] worthy of major investment, including most notably, virtually every major broadcaster. After spending years building an audience, the original three largest webcasters [AOL, Yahoo! LaunchCast and MSN] fled the business after the last rate hike was imposed,” according to Westergren, who says artists, and fans, can do better.

Evening out the music royalty rates for all digital audio services will drive investment and accelerate growth in the sector, he predicts.