Recording Industry Lobbyists Accuse Pandora Of Deliberately Not Selling Ads To Plead Poverty To Congress

from the right,-and-the-labels-just-need-to-sell-more-albums dept

I'm always amazed at how copyright maximalists from the entertainment industry insist that no one can comment on their own businesses unless they're "in it" while freely commenting on other businesses they clearly know nothing about. Here's the latest example. The musicFIRST coalition, which is basically a lobbying operation set up by a few of the big legacy players in the recording industry (including the RIAA, A2IM and SoundExchange) in order to push for ever higher royalties for music, has been fighting hard against any effort to create royalties for internet companies that would allow those companies to survive. Like the Golden Goose, the labels have decided that if anyone online is making money, it's best to squeeze as much of it out of them as possible until they're dead, rather than allowing them to grow and to provide sustainable revenue back to the industry.

But their latest blog post really takes public cluelessness to new and impressive levels. It's a response to the news that Pandora's listener base has been growing. That should be celebrated, but, as Pandora has been pointing out for ages, thanks to the crazy high royalty rates that it has to pay SoundExchange (which are many times the rates of satellite radio and infinitely larger than terrestrial radio, since terrestrial radio has an exemption from performance royalties) it is close to impossible for Pandora to ever be profitable. Even worse (for musicians, the industry and the public) these crazy high rates means a lot less competition, fewer new authorized services and a smaller market overall. Pandora has been seeking more reasonable rates that would actually allow it to provide more services and to grow the overall pie even more by adding more value. However, so far, that's been cost-prohibitive given how much goes out the door to SoundExchange.

So, along comes MusicFIRST with the "solution" to all of Pandora's profitability problems: sell more ads. No, that's not a joke. They seriously seem to think that Pandora's problem is that it has chosen to take on less revenue and that all it has to do is turn the knob up and sell more ads:
As economist Jeff Eisenach testified last year regarding Pandora royalties, "the ratio of Pandora's content costs to its revenues is within Pandora's control: To raise its revenues, it need only choose to sell additional advertising" or find other ways to cash in on its popular and successful product.

Pandora is choosing to limit revenues for now by keeping advertising low and attracting customers to its free service tier.... It's no reason to plead poverty in the face of massive audience growth and "better than expected" earnings reports.
As someone who relies on advertising for a portion of my income, I wish musicFIRST had just told me all along that the fact that ad rates are so low and that fill rates are so dismal on advertising all across the internet is because I just wasn't trying enough and that I'd purposely been "limiting revenues." Why don't we just flip that one around? Perhaps the reason that the major labels and SoundExchange have been making so little money is that they're not selling enough. All they need to do is sell more and all their problems are solved. No need to go plead poverty to Congress and demand a jacking up of rates, since -- by their own logic -- they just need to sell more, and clearly, that's easy. If they're not selling more, it's because they've decided to limit revenue.

Stories like this make you wonder if anyone actually takes musicFIRST seriously.

Separately, musicFIRST trots out the lamest trope in the book in the attacks on Pandora: focusing on the value of the company and the equity its founders hold. Only someone who is deliberately misleading or completely clueless on basic financial issues would equate a company's valuation with revenue. The two are wholly different beasts. And yet, these lobbyists pretend that the equity that Pandora execs hold somehow is taken unfairly from artists. That, of course, makes no sense if you actually understand the difference between equity and revenue. Any artist could have had the same equity if they had built Pandora. They didn't, so they don't.


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    Ninja (profile), Apr 5th, 2013 @ 7:30am

    Right, put a ton of ads in your service, annoy people to the point they'll simply let go (or block the advertisement which is incredibly counterproductive).

    Annoy the customer, provide a worse experience. Sounds like something the MAFIAA does regularly. No wonder they think it's the way to go.

     

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      Anonymous Coward, Apr 5th, 2013 @ 9:08am

      Re:

      Selling more ads is the MAFIAA's method of connecting with fans.

       

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      Tom (profile), Apr 5th, 2013 @ 9:35am

      Re:

      Their own argument creates an inverse relationship between advertising and listeners. They said fewer ads=more listeners, so that must mean more ads=fewer listeners.

      So their "solution" would put Pandora out of business.

       

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        Ninja (profile), Apr 5th, 2013 @ 10:13am

        Re: Re:

        Who are you referring to when you say "their" argument? I believe Pandora doesn't want to overload their visitors with ads to provide a better experience isn't it?

         

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          nasch (profile), Apr 5th, 2013 @ 11:49am

          Re: Re: Re:

          Who are you referring to when you say "their" argument?

          musicFIRST. They said Pandora is keeping ads infrequent to attract users.

           

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          Anonymous Coward, Apr 5th, 2013 @ 1:16pm

          Re: Re: Re:

          Pandora doesn't need to overload its ads; an extra 30 seconds AN HOUR would gain them a metric ton more revenue. Masnick knows this of course, but is too intellectually dishonest to point it out.

          Artist-hating Mike Masnick also conveniently leaves out this nugget:

          http://www.digitalmusicnews.com/permalink/2012/121120pandora39

           

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            Karl (profile), Apr 5th, 2013 @ 6:27pm

            Re: Re: Re: Re:

            Artist-hating Mike Masnick also conveniently leaves out this nugget:

            On the other hand, he also left out this nugget:
            http://mediadecoder.blogs.nytimes.com/2013/02/27/pandora-to-limit-free-listening-citing-roy alty-costs/
            The cost of music has been a persistent issue for Pandora, which by law pays a fraction of a cent in performance royalties each time a song is played on the service. That has tended to amount to 50 percent to 60 percent of the company’s revenue; it also pays a much smaller portion of its income to music publishers.

            As a (co-)songwriter, Ellen Shipley would only get part of the royalties going to music publishers... which are only a small part of the royalties that Pandora pays.

            The lion's share goes to the copyright holders - which are the RIAA clients (record labels), who are not-so-coincidentally the people behind musicFIRST.

             

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        Anonymous Coward, Apr 5th, 2013 @ 10:28am

        Re: Re:

        So their "aim" is to put Pandora out of business.

        FTFY

         

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    Jeff (profile), Apr 5th, 2013 @ 8:21am

    I tend to think this is a case of "projection". The RIAA is taking their "screw your customer" attitude and projecting it on to Pandora.
    Just because they've gotten filthy rich by ripping off their artists, and their customers doesn't mean Pandora has to use the same business model to succeed.

     

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      Anonymous Coward, Apr 5th, 2013 @ 9:39am

      Re:

      "The RIAA is taking their "screw your customer" attitude and projecting it on to Pandora."

      Of course they are. They don't want a any other solution out there but themselves.

       

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    Lord Binky, Apr 5th, 2013 @ 9:11am

    It applies to everyone.

    Labels are choosing to limit revenues for now by keeping middle piece intermission advertising low and attracting customers to its interruption free service tier.

    Why would the music industry not stop the content people want to inject an advertisement. Television networks do it all the time. Radio shows do it between music pieces as well, so why not stop the piece when people are listening. That's leaving money on the table, the music industry can't complain of losing money if they are not taking every opportunity to make money.

    Disregard the effect this has on the customer base and how much they value what they are paying (or not paying) for. The consumers should never get to determine what anything is worth, they should just take what they are offered and be happy. Ugh, dirty peasant consumers.

     

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    Anonymous Coward, Apr 5th, 2013 @ 9:11am

    Funny. Pirate websites manage to make hundreds of thousand per year on ads. I guess having to pay for fixed costs (content) actually does matter after all. Right, Masnick?

     

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      Anonymous Coward, Apr 5th, 2013 @ 9:13am

      Re:

      Proof: zero.

       

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        Anonymous Coward, Apr 5th, 2013 @ 9:33am

        Re: Re:

        Holy shit! The recording industry is just letting hundreds of thousands of dollars go to waste every year by not setting up a piracy website? The motley fools!

        They could call it the British Navy Bay and watch the money roll in. Seems kind of stupid on their part, don't you think?

         

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          Anonymous Howard (profile), Apr 8th, 2013 @ 3:15am

          Re: Re: Re:

          I think you tried to be sarcastic and failed.

          You hit the mark quite accurately: the music industry could rake in mounds of dosh by setting up a "pirate website" and selling ads, merchandise, etc, but they choose not to and instead wasting money on lobbying and lawsuits.

          Yes, they are actually motley fools..

           

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      Anonymous Coward, Apr 5th, 2013 @ 9:16am

      Re:

      Never mind the fact that those "costs" are completely arbitrary and artificial.

       

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      Anonymous Coward, Apr 5th, 2013 @ 9:22am

      Re:

      Artificial costs you mean.

       

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      crade (profile), Apr 5th, 2013 @ 9:47am

      Re:

      lol, where do you get this crap from? Royalty rates are fixed costs now and someone claimed fixed costs don't matter? You lie poorly.

       

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      Ninja (profile), Apr 5th, 2013 @ 10:36am

      Re:

      Pirate websites manage to make hundreds of thousand per year on ads.

      This was already discussed here and it has been proven to be false. Most sites make barely enough to stay afloat and those that are very successful would still not cover a middle-class household wages by a decent chunk. And yet they provide better services and experience than the MAFIAA.

      I have yet to see a "piracy" site owner with all those yachts, luxury cars and uber mansions. Unless you believe Google is dedicated to piracy which would be just proof of your ignorance.

       

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        Anonymous Coward, Apr 5th, 2013 @ 12:36pm

        Re: Re:

        Lol. Kim Dotcom got all those cars and his mansion how again? You pirate douchebags are hilarious.

         

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          Internet Zen Master (profile), Apr 5th, 2013 @ 2:07pm

          Re: Re: Re:

          Kim Dotcom's a statistical outlier in all of this, and given the fact that over 50% of the content hosted on MU was almost never touched after being uploaded or was non-infringing material, your assertion that Dotcom allegedly made his fortune on copyright infringement alone is rather misleading.

           

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          JMT (profile), Apr 5th, 2013 @ 4:04pm

          Re: Re: Re:

          "Kim Dotcom got all those cars and his mansion how again?"

          By providing a service that millions of people around the world considered worth paying money for. You should try it some time.

          And even if you went along with your provably false statement that MU was a genuine 100% piracy site, your one solitary example proves very little. The claim is that lots of piracy sites are getting rich, but you have no other examples.

          "You pirate douchebags are hilarious."

          And your attitude to the very people whose behaviour you want to change is hilariously stupid. Why would I listen to anybody who calls me names?

           

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      James Burkhardt (profile), Apr 5th, 2013 @ 10:50am

      Re:

      royalty rates arent't fixed costs. They are variable costs (more songs played, more royalties) that can not be directly tied to the main revenue (subscriptions) only secondary revenue, and only some of the time (ads on free service).

       

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      Ruben, Apr 5th, 2013 @ 11:31am

      Re:

      I

       

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      D, Apr 6th, 2013 @ 11:29am

      Re:

      Oh - so it's "Masnick" now, is it and not "Mike"? Had a temper tantrum have we, OOTB in disguise again?

       

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      The Groove Tiger (profile), Apr 7th, 2013 @ 12:43pm

      Re:

      Well, selling parrots and eyepatches online must be very profitable.

       

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    Anonymous Coward, Apr 5th, 2013 @ 9:15am

    Yeah, people REALLY love ads. Let's get more of that.

    By the way...

    Show of hands: who here is using AdBlock/NoScript/hosts file/firewall/something else to block ads?

    * Raises both hands and one foot *

     

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      Anonymous Coward, Apr 5th, 2013 @ 9:18am

      Re:

      AdBlock, AdBlock Plus, NotScripts (Chrome), FlashBlock.

       

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      MikeVx (profile), Apr 5th, 2013 @ 9:28am

      Raises hand.

      Hand, foot, eyebrows, blood pressure. :-)

      Actually, that last is going down because I don't have to deal with web screens that are more garbage than anything else. I've seen what the web looks like on non-blocked computers, how can people stand it, and how can the data overages not destroy them from the ads being 90+% of the page data?

      Ad blocking is just simple security practice. Aside from ads being a form of fraud in and of themselves, ad networks are infested with malware to an insane degree. If I service a computer, an ad blocker is mandatory, you are getting at least one, or I will not waste my time trying to fix your system.

      Since Google has placed their revenue over the security of their users, root your Android device, find F-Droid, get Ad-Away, update every now and then.

       

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      Tom (profile), Apr 5th, 2013 @ 9:38am

      Re:

      I am using adblock, but ONLY because some of the blogs I visit tend to display ads that my work firewall blocks. Rather than continually generate "this guy is viewing blocked content!" alerts with my security folks, I started blocking ads.

      I really *don't* want to do that, and I don't use ad blocks on my tablet or my home PC.

       

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    Atkray (profile), Apr 5th, 2013 @ 9:20am

    Once again Mike you overlook the obvious :P

    "Only someone who is deliberately misleading or completely clueless on basic financial issues would equate a company's valuation with revenue."

    Or

    Both

     

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    out_of_the_blue, Apr 5th, 2013 @ 9:22am

    I'm fairly sure "copyright maximalists" DO have all sources tapped.

    Be a real surprise if not.

    "And yet, these lobbyists pretend that the equity that Pandora execs hold somehow is taken unfairly from artists." -- WHERE ELSE DOES IT COME FROM? Pandora produces nothing; like Megaupload or any other file host, it's simply a middleman grifting off the value artists make.

    "Any artist could have had the same equity if they had built Pandora." -- BUT Pandora could NOT have the same equity WITHOUT artists! See the difference there? You CLAIM you're for artists, but ALWAYS in practice you're for the grifters who get unearned income from the art.

    This is another case where you package up disparate notions and try to put them all over at once without anyone noticing. 'Sides that, if you deny that financial tricks can minimize revenue now for future gains, then it's you who are clueless about human nature.

     

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      Anonymous Coward, Apr 5th, 2013 @ 9:33am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      What does the RIAA produce?

       

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        Anonymous Coward, Apr 5th, 2013 @ 9:41am

        Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

        Influence in Washington?

         

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        Leigh Beadon (profile), Apr 5th, 2013 @ 9:43am

        Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

        Indeed. For that matter, what does eBay produce? What does Wal Mart produce? What does a grocery store produce? What do banks produce? What do airlines produce? What do taxis produce? What do daycares produce?

        OOTB is living under the bizarre delusion that you have to "produce" a "thing" in order to create value.

         

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          out_of_the_blue, Apr 5th, 2013 @ 9:57am

          Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

          @ "OOTB is living under the bizarre delusion that you have to "produce" a "thing" in order to create value." -- Here's a nicely circular case in point: IF your tertiary comment has ANY value, it's only because of the original value that I produced.

          For the record, I'm not fond of retail or other grifters. Some is necessary for the distribution chain, but it's ALL grifting off what labor makes. Look up Labor Theory of Value.

          Obviously you've never done real work, or you'd KNOW in your bones and sinew the root source where ALL value comes from: human labor. -- No, brains ain't enough, takes people actually producing goods. You can think yourself rich as you like, but will starve if no laborer feeds you.

           

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            Anonymous Coward, Apr 5th, 2013 @ 10:18am

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            It's a symbiotic relationship.

            The labourer will starve too without the tools and the technology to produce (or transform) goods, and the mechanisms to distribute them.

            You make the mistake of thinking that only the production links of the chain are essential, making all others redundant.

            The reality is that no business will survive for long without a strong distribution channel. Why do you think that the wheel and axle was such a vital invention for humanity?

             

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            Chosen Reject (profile), Apr 5th, 2013 @ 11:35am

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            So Pandora has used no human labor? What exactly do you think the developers and marketers and ad space sellers at Pandora do? And how is what they do any different than what the musicians do? If "brains ain't enough", then why are you so pro-copyright and pro-patent?

             

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            Anonymous Coward, Apr 5th, 2013 @ 12:27pm

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            but will starve if no laborer feeds you.

            So only farmers don't grift???

             

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              Anonymous Coward, Apr 5th, 2013 @ 7:02pm

              Re: Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

              Those thieves steal animal production and the hard efforts of plants. I'm not fond of farmers or other grifters. Some is necessary for the distribution chain, but it's ALL grifting off what nature makes.

               

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            Anonymous Coward, Apr 5th, 2013 @ 1:44pm

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            Middle men are not grifting, they are arbitraging.
            I do not like middlemen either. Record companies are a great example of pure middlemen, providing nothing but contacts to artists, rubbing them of their intellectual rights and arbitraging their costs.

            Labor Theory is a bit old today where clothes stores run prices up by 100s of percents and several other parts of the market lack the perfect information needed. Also, laborers needed is a smaller and smaller percentage of the society as machines take over a larger part of society. Last I checked 80+ % of people in jobs are middlemen in some shape or form and that number will likely increase...

             

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            Karl (profile), Apr 5th, 2013 @ 6:09pm

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            No, brains ain't enough, takes people actually producing goods. You can think yourself rich as you like, but will starve if no laborer feeds you.

            You do realize that this goes against the very idea of "intellectual property," right? It means that authors, songwriters, designers, etc. are not "actually producing goods," since they work with their brains alone.

            In fact, generally people who espouse the "Labor Theory of Value" are not very artist-friendly at all, as they view payments for art as an example of commodity fetishism.

             

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              Anonymous Coward, Apr 6th, 2013 @ 5:46am

              Re: Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

              Yeah. It is fascinating how anarcho-libertarians and marxist communists are in agreement on quite a lot of areas, like war and IPR. They are focused on achieving their goals to the point where both see military industry and entertainment industrues as being obstacles to achieving "pure free market" or "a free and equal world". Given how these political ideologies are popular among young people, it is an interesting future for these stables in our days society!

               

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        out_of_the_blue, Apr 5th, 2013 @ 9:47am

        Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

        @ "What does the RIAA produce?" -- A good point, AC, and since you've clicked on "reply", besides tacitly admit Pandora gets unearned income, I'll answer similar just for YOU:

        Without the least hedge: The RIAA produces a lot of fat cats who get rich grifting with unearned income off artists. -- Now, IF you would ever take time to read my posts, you'd know I've NO trouble admitting that. I'm against unearned income wherever and however it occurs.

        You need to see that your split is mostly with Mike, who yet again HERE is exactly defending Pandora's unearned income. Pandora is trying to be EXACTLY like the RIAA, that's really about all the difference between "teh internets" grifters whom Mike favors, and the existing ones. I'm against ALL grifters; Mike is FOR some.

         

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          Anonymous Coward, Apr 5th, 2013 @ 9:57am

          Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

          Pandora gets earned income by delivering the artist to the user in a way the user wants. Pandora creates efficiency for the artist by getting them in front of as many people as possible. This creates exposure, which creates a fan base which delivers income to the artist. I don't agree that they grift off of the artists.

           

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            out_of_the_blue, Apr 5th, 2013 @ 10:01am

            Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

            @ "I don't agree that they grift off of the artists." -- Well, you can not agree all you want, but FACT is that Pandora has NOTHING without artists, NOT the other way round. So Pandora MAY be useful to artists for distribution, but you like Mike are in practice clearly putting Pandora ahead of artists, and that's supposedly exactly what you think is wrong with the RIAA and its fat cats.

            I don't see any point to going another circle on this. You ADMIT my points, just don't want to be seen agreeing. Fine.

             

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              Ed C., Apr 5th, 2013 @ 10:33am

              Re: Re: Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

              Well, you can not agree all you want, but FACT is that Pandora has NOTHING without artists, NOT the other way round.

              You do realize what a service is, right? Pandora provides a service to artist and customers which has value for both. And yes, the labels, even the RIAA, provide services too. The problem is, they demand too much money for the value they create, and are trying to wedge themselves in between the artist and Pandora to extract money where they're not creating any value.

               

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          Anonymous Coward, Apr 5th, 2013 @ 11:11am

          Re: Re: Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

          "Without the least hedge: The RIAA produces a lot of fat cats who get rich grifting with unearned income off artists. -- Now, IF you would ever take time to read my posts, you'd know I've NO trouble admitting that. I'm against unearned income wherever and however it occurs."

          Like the money you make from your corporate masters for posting here, boy?

           

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      Anonymous Coward, Apr 5th, 2013 @ 9:44am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      Equity is the money the investors or owners put up to form the company.

       

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      Anonymous Coward, Apr 5th, 2013 @ 9:47am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      "I'm fairly sure "copyright maximalists" DO have all sources tapped.

      Be a real surprise if not."

      The joke of the day.

      Tell me, have you been paying attention to the past...oh...one hundred years of the copyright industry's existence?

       

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      Jeremy2020 (profile), Apr 5th, 2013 @ 10:24am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      "Pandora produces nothing; like Megaupload or any other file host, it's simply a middleman grifting off the value artists make. "

      We all know that is the Recording Industry's job!

       

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      cpt kangarooski, Apr 5th, 2013 @ 10:55am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      "And yet, these lobbyists pretend that the equity that Pandora execs hold somehow is taken unfairly from artists." -- WHERE ELSE DOES IT COME FROM? Pandora produces nothing; like Megaupload or any other file host, it's simply a middleman grifting off the value artists make.

      That's true of many middlemen, I suppose. So what?

      A used bookstore doesn't send any money to authors, nor used record stores to songwriters or musicians.

      The law doesn't give authors a right to all revenues attributable to their work. Indeed, it should only mete out to them the minimum rights necessary to get them to create and publish works that they otherwise wouldn't. Giving them more than that is needless waste.

       

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      Anonymous Coward, Apr 5th, 2013 @ 11:09am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      BUT Pandora could NOT have the same equity WITHOUT artists! See the difference there? You CLAIM you're for artists, but ALWAYS in practice you're for the grifters who get unearned income from the art."
      should read...
      "BUT DISNEY could NOT have the same equity WITHOUT artists! See the difference there? You CLAIM you're for artists, but ALWAYS in practice you're for the grifters who get unearned income from the art."

      Thanks for agreeing with us, boy.

       

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      James Burkhardt (profile), Apr 5th, 2013 @ 11:12am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      "BUT Pandora could NOT have the same equity WITHOUT artists!" Equity is money put in by owners/shareholders to form the company, i.e. all the starting capital that goes into servers, salaries for programmers who write code before you make money, ect. It also contains a profit/loss balance (retained earnings/loss), but that number is still not a representation of cash-in-hand which could be given to someone. moreover, in pandoras case, its likely retained loss, meaning none of that equity comes directly from music yet, it all come from investors you believe in the service

      "Pandora produces nothing; like Megaupload or any other file host, it's simply a middleman grifting off the value artists make. " So the local top 10 station is a middleman grifter right? as is XM radio? Without specialized software, I cant download from pandora. Moreover, i can't tell it to play me a specific song. It also takes a lot of work to get pandora to give me a great radio station. But thats what pandora is, personalized radio. Not a file locker.

      "This is another case where you package up disparate notions and try to put them all over at once without anyone noticing"
      Seems your the one picking up 'disparate notions' there, with equating file lockers to Radio, and trying to obscure what equity is and how one gets it by conflating the value of 'music' with investment in 'the service', the latter being the only source of equity on Pandora's books.

       

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      Ruben, Apr 5th, 2013 @ 11:35am

      Re: I'm fairly sure "copyright maximalists" DO have all sources tapped.

      Does radio fall into the 'grifter' bracket? What about the oscars or grammys? They're just surfing the coattails of popular content.

      What's the matter, cat got your tongue?

       

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    Anonymous Coward, Apr 5th, 2013 @ 9:29am

    "Pandora produces nothing; like Megaupload or any other file host"
    Kind of like you. Except unlike Pandora, nobody wants to listen to you.

     

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    Tom (profile), Apr 5th, 2013 @ 9:32am

    The argument contradicts itself

    MusicFIRST's own argument contradicts itself:

    "Pandora is choosing to ... keeping advertising low and attracting customers to its free service tier."

    This statement implies that fewer advertisements attract customers. The inverse of this argument is that more advertising drives customers away.

    So their solution is "sell more advertising, " which, based on their own argument, will drive customers away.

    So their own argument says that Pandora isn't going to make more money by advertising more. They'll simply lose customers, therefore not making any more money for royalty licensing.

    FWIW: I think ALL forms of radio should pay exactly the same amount: online, satellite, and terrestrial. I discover (and buy) a lot more music these days online than I do on FM, yet FM is the one that doesn't have to pay jack for royalties.

     

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      Anonymous Coward, Apr 5th, 2013 @ 11:06am

      Re: The argument contradicts itself

      On your last point, I'm pretty sure they agree with you. They believe that FM should be paying royalties.

       

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    Anonymous Coward, Apr 5th, 2013 @ 9:35am

    it's simply a middleman grifting off the value artists make.

    Even with the loose interpretation of 'value', that business model sounds familiar somehow... are you saying the recording industry has that street corner staked out and no other bums are allowed?

    if you deny that financial tricks can minimize revenue now for future gains, then it's you who are clueless about human nature.

    Again, even though I can't construe your take on Mike's article with what I read in the same article, that sounds somehow familiar.

    I've seen the facts on the MPAA associated companies setting up shell companies and charging them absurd amounts for nominal cost services, then claiming "losses" so they don't pay have to pay royalties.... but I haven't seen a writeup of how the Recording industry does this.... Article or reference or 'where have you been dipshit?' request!

     

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    identicon
    I can see it now..., Apr 5th, 2013 @ 9:39am

    Recording Industry Business Model:

    "Looooooooooots of ads!"

     

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    Anonymous Coward, Apr 5th, 2013 @ 9:44am

    I say Pandora should say they are colluding to keep prices high on Pandora. Clearly the recording industry isn't charging the radio stations as much.

     

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    Vic B (profile), Apr 5th, 2013 @ 9:52am

    To have or not to have

    I don't listen to commercial radio because music only serves to occasionally interrupt advertisers. I've been listening to Pandora for at least 2-3 years but have been getting turned off by it because of the louder, more frequent and longer ad interruptions. As a consequence, I've actively searched for and downloaded one of its competitors (Slacker) which I listen to more now because it is what Pandora used to be.
    Some might suggest I pay Pandora $50 ($60?) per year to hear music with no commercial interruptions. The problem I have with paying for listening to music is that it turns me from a passive listener (which I happily am) to an active stakeholder (am I getting what I want for my money? Are there better ways to spend that money?...) I don't know about you but I have enough on my plate not to want to think about such questions and more financial commitments than I care to juggle with.
    Something tells me I'm not alone with this dilemma...

     

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      Pixelation, Apr 5th, 2013 @ 11:36am

      Re: To have or not to have

      I won't pay to listen to Pandora. I know where the money is going and it isn't to the artists.

       

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        Anonymous Coward, Apr 5th, 2013 @ 12:47pm

        Re: Re: To have or not to have

        Keep lying to yourself. Maybe it'll eventually work.

         

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          Pixelation, Apr 5th, 2013 @ 3:10pm

          Re: Re: Re: To have or not to have

          "Keep lying to yourself. Maybe it'll eventually work."

          That's the sound of the leech in the middle.

          Don't feed the leeches.

           

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        Julian Perez, Apr 6th, 2013 @ 4:34am

        Are you mental?

        Rates for Pandora are better than rates for terrestrial radio and satellite/XM.

        By the way, part of the reason for the minimized paycheck for artists from these royalties are the cut for the REAL middlemen.

        And look up the economics concept of "ancillary value." It's revenue that didn't exist before because a new way of making money exists.

        This perspective is nothing more than luddite technophobia from organizations with a tradition of smallminded, shortsighted technophobia, the guys who resisted the player piano all the way down to the VCR.

        If you knew anything about technology, by the way, you'd know Pandora is - mostly - free. You don't have to PAY for it if you want to use it.

         

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    That Anonymous Coward (profile), Apr 5th, 2013 @ 9:53am

    Oh look I found kind of a call back...

    https://www.techdirt.com/articles/20120323/15173518227/how-monopolies-strangle-innovation-record-lab el-demands-making-investors-nervous-about-spotify.shtml#c35

    The content is worth more more more.
    Because someone else put the time and effort into building a platform that met what consumers wanted, but they shouldn't get anything for doing what we were unwilling to do ourselves.

     

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    Anonymous Coward, Apr 5th, 2013 @ 9:55am

    if the answer for Pandora increasing it's revenue were to be selling more advertising, anyone with half a brain must know the next step that musicFIRST etc would take. they would go cap in hand to the fucking idiots in Congress, saying that as Pandora is making more money, it must be because there isn't the correct amount being paid out and demand increases in their share. that would mean Pandora doing more work, earning more money but paying that extra out to the industry reps, so ultimately being no better off. we all know how the entertainment industries are fond of fleecing as many people and companies as possible, whilst doing nothing to earn any income, this would be another classic example and those Senators would be falling over each other to get it for them!

     

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    Anonymous Coward, Apr 5th, 2013 @ 9:55am

    Reminds me of the congressman/business owner arguing against tax hikes for the rich, by insisting in congress he couldn't possibly feed his family of himself and his wife on ONLY $250,000 a year in revenue from a business he started but does next to nothing with now that he's in congress. And that's not even counting his congressional salary of over $100,000 a year.

     

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    Anonymous Coward, Apr 5th, 2013 @ 9:58am

    I will not exposed my computer security to ads, well known at times to carry malware in the iFrame. I can not tell from the look of any ad which may or may not have malware in it prior to exposure. I do and will continue to actively do everything in my power to block any and all ads. I hate a commercial. Want to get rid of me, being a fresh set of eyes on a webpage? Expose me to ads I can't block. The content, whatever it is, is not worth the risk.

    There was recently an article where an online magazine was bitching that roughly 40% of it's viewers were blocking ads. That can't be because those potential customers enjoy ads. Ads are like a pest industry no one wants but those that make money off of it.

     

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    average_joe, Apr 5th, 2013 @ 10:46am

    Usual rubbish coming from RIAA sell more ads more money, more pay walls, more restrictions.

     

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    jakerome (profile), Apr 5th, 2013 @ 12:41pm

    musicFirst isn't a business

    musicFirst is an organization founded by a group of co-aligned cartels. Collectively, they have not earned profits by competing on the basis of creating better products. Rather, they conspire amongst each other to maintain high prices in order to extract monopoly profits. When even that fails as the market routes around a broken business model, they resort to Plan B.

    Plan B, of course, has been spectacularly successful. Essentially they compensate (via lobbying jobs, campaign contributions, and movie cameos) elected officials to pass laws that guarantee these dieing businesses a certain level of revenue. They enlist the FBI & other law enforcement personnel to act as their private police force against the interests of the citizens they are supposed to serve & protect. And finally, public prosecutors serve as their personnel law firm, pursuing average citizens and imprisoning them for what are, at worst, minor torts.

    Given the massive sense of entitlement that these failed industries have come to expect, it's no wonder that they have no idea how real businesses work. As the RIAA continues to fail financially, there only recourse is to enlist the state to increase their legally mandated compensation. So, of course they expect Pandora and other businesses to do the same. Not making enough money? Just tell people to give you more! Maybe Pandora should follow the RIAA playbook and begin bribing (because that's what it is) government officials to force advertisers to spend a minimum amount advertising on Pandora each year.

    Of course! That's the real solution. Let's make Apple & GM & Coca-Cola support the lazy, unethical RIAA executives by forcing them to each spend $100 Million/ Year on Pandora so that Pandora can continue to pay government-mandated monopoly rents to 4 failing businesses. Or maybe it's 3. I dunno, but pretty sure it will be zero eventually, then maybe we can move past all this. Once the rent-seekers are removed from the equation, I suspect revenue will increase at a greater pace and artist income will likely double or triple as the inefficiencies of the dieing record labels are eliminated and the middlemen found themselves out of a job.

     

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    DanZee (profile), Apr 5th, 2013 @ 2:03pm

    Control

    It's always been about record industry control and not making money. Ask the musicians who get $5 royalty checks from having their songs played on Pandora while their record labels rake in millions.

     

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    DOlz, Apr 5th, 2013 @ 4:04pm

    There's a reason for that

     

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      DOlz, Apr 5th, 2013 @ 4:05pm

      Re: There's a reason for that

      "And yet, these lobbyists pretend that the equity that Pandora execs hold somehow is taken unfairly from artists."

      They believe that because that's how the media companies that they represent operate.

       

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    Anonymous Coward, Apr 5th, 2013 @ 7:27pm

    Any service that wants to remain in existence needs to take politics into consideration and they need to ensure that their users are aware of the politics involved in trying to make the service worse to the benefit of some lazy government established monopolist.

     

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      Anonymous Coward, Apr 5th, 2013 @ 7:33pm

      Re:

      In fact, the open source movement (ie: GPL licenses, etc...) has done a pretty good job of this. The licenses, and their sources (ie: Websites, like the GPL website), are pretty good at letting people know about certain requirements that must be met for this software to continue (ie: regarding patents), even if only indirectly in principle. Any service, like Pandora, must do something to make its users aware about these requirements. It doesn't have to be directly but there are some indirect routs that can be taken. Getting people informed about the problems we face is the first step towards correcting it. and it shouldn't get more difficult as Pandora's user base expands, it should become easier as more users could equal more informed users which could result in more political pressure that prevents the service from getting worse. Pandora and service providers need to ensure, from the outset, that users are at least minimally aware of the minimum requirements that must be met for the service to continue so that, as the user base of a service expands the service has more informed users that are able to put political pressure on politicians to ensure that bad laws do not destroy the service.

       

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    ChronoFish (profile), Apr 8th, 2013 @ 5:46pm

    Important to keep the discussion - not preaching to the choir

    I'm a long time follower and occasionally comment provider.... I'm sad to see so many of the alternate views having been flagged:

    "This comment has been flagged by the community. Click to show it."

    Is this what TechDirt has become? Is the community so sensitive that it must hide the alternate viewpoints? I have yet to a viewpoint that was in any way offensive. At least not to the point that it should have been hidden.

    Man Up TD. Your arguments stand on their own. You don't need to engage in protectionism....that just makes you like those you claim to be against....

    -CF

     

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      nasch (profile), Apr 9th, 2013 @ 8:02am

      Re: Important to keep the discussion - not preaching to the choir

      I have yet to a viewpoint that was in any way offensive.

      I agree people are a bit trigger happy, but the report button is for comments that are "abusive, spam, trollish, or otherwise inappropriate". Almost 100% of reported comments are in the "trollish" category (meaning they're reported for that reason). Many, such as almost everything ootb writes, and I think absolutely everything darryl writes, are trollish.

      To be honest, most of the opposing comments around here, by volume, are ad hominem, strawman, off topic, or otherwise not a useful contribution to the discussion. When someone posts a thoughtful disagreement I think it usually stays up. But I'm sure there are some that are incorrectly caught up in the net.

       

      reply to this | link to this | view in chronology ]


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