Articles: Pandora - Good for Music?

I first read this piece from Pandora on the payment out to artists listened to on Pandora.  Seems nice… until I read the Lefsetz Letter follow up.  What do you think?

Pandora: Pandora and Artist Payments

"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% of radio listening in the U.S., and not come away thinking something is wrong.

Pandora was founded on the principle of supporting artists and we're proud to pay performance fees. We think artists could and should ultimately earn even more. But all of this revenue is coming from a single company. A predatory licensing fee orchestrated over ten years ago by the RIAA and their lobbyists in Washington has devastated internet radio. Few now deem it 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. This is not a recipe for a sustainable industry. It is a destructive stranglehold that is putting at risk a much larger reward for musicians everywhere."

(Continued... Pandora: Pandora and Artist Payments)

Lefsetz Letter » Blog Archive » More Pandora

"Tim Westergren is not running a music service, but a religion. He expects his flock to follow him blindly, leaving their minds behind, all with the goal of lining his pockets.

He owns stock worth double digit millions, yet he’s complaining the company’s getting screwed. Who does this resonate with? Certainly not artists or listeners.

And now in this latest blog post he raves about how much obscure artists are making on his service so he can rationalize paying them less. Huh?

What he’s saying is if you let me pay less, the sphere will grow and you’ll make tons more money! Never mind that this is anathema to Pandora’s shareholders. You can only listen to one radio station at one time, whether terrestrial, satellite or Internet, people only have so many hours in a day, where are all these listening hours gonna come from? It’s kind of like the Internet. If I’m surfing all night, I can’t watch television. Hell, I oftentimes can’t even listen to music! Market share is everything, and Tim Westergren seems to be saying here that he’s willing to give up some of his. This is like Lucian Grainge giving away Parlophone if the European Commission would just approve the EMI merger… How duplicitous can you get?"

(Continued... Lefsetz Letter » Blog Archive » More Pandora)