Alienating Artists, NPR Allies with Pandora as a Music Licensing Ludditeon May 12, 2015 at 3:48 pm
A storm of criticism flared up earlier this month in one of the most unlikely places, as independent artists took NPR to task over its support of Pandora. The publicly-funded broadcasting platform is generally considered to be a bastion of support for the arts and creativity, but lining up alongside the streaming music company as it attempts to reduce royalty payments to artists has many reconsidering that relationship.
The tension arises from NPR’s unexpected move to join the Music, Innovation and Consumers (MIC) Coalition, a misleadingly named group of exceedingly wealthy companies masquerading as consumer rights advocates who also want to support musicians. You’ll notice also the inclusion of “innovation,” a term frequently trotted out by tech lobbyists to signify forward-thinking ideology, without requiring any actual rationale to back it up.
In fact, innovation is far from what MIC, whose members include Google, Amazon, several Clear Channel-associated organizations, is targeting. These well-funded entertainment retailers and venues would, at worst, prefer to keep the royalty rate at its current level, regardless of other industry factors. If they have their way in the ongoing court battle that Pandora is leading, that rate could even be reduced, despite the continued flow of revenue from other areas of the music industry as a result of lower prices and increasing piracy.
(More frustrating is the fact that Google, a key member of MIC, is so ineffective in tackling its anti-piracy responsibilities and so contributes to those lower revenues, but that’s a longer article for another day.)
Also at fault here, and very much compounded by the efforts of those in the MIC coalition, is the outdated way that music licensing is handled.
By forcing songwriters into a compulsory licensing system that dates back many decades before digital streaming services were even conceived, the law as it stands not only denies artists the basic right to control how and where their music is used, but also denies them any influence over the rate that usage pays. Is there any other industry you can think of in which those who create a product are so heavily regulated as to price and distribution?
Elizabeth Matthews, CEO of the American Society for Composers and Performers (ASCAP) reiterated this point in a statement last week:
“We are encouraged that the Department of Justice is reviewing the ASCAP Consent Decree and by the growing chorus of voices in support of our efforts to modernize music licensing.
Powerful corporate interests, like Pandora, are determined to stand in the way of meaningful music licensing reform so that they may continue to shortchange songwriters.”
Clearly, MIC members have no wish to update this legacy system (again, how is this an innovative approach?) Any update would surely give greater control over agreements to artists, which would mean more negotiating power and extra effort for those who pay to license music. Better for them to keep this blanket system in place, deal with a few organizations, and even have the audacity to complain that rates are too high and use their corporate influence to lobby for lower royalties.
So while NPR’s association with the MIC coalition and its underlying goals is something of a head-scratcher, Pandora’s membership is right in line with its drive to undercut artists’ rights at every turn. The streaming service has 75 million users listening to 1.5 billion hours of music every month. Last year it made more than $920 million in revenue, on an upwards trajectory that should see the company break the $1 billion mark in the near future.
In short, Pandora is not a start-up that is struggling for funds, it is a dominant player in the established streaming music market place and must now acknowledge its responsibilities to fair pay for fair play.
This is a company that should be doubling down on music investment, not attempting to pull the royalty rug from under songwriters feet when they need it most. Without original artists and the music they create Pandora has nothing, it’s user base has no reason to log in.
Meanwhile, at an executive level, NPR would be well advised to get back on board with artists and maintain its cultural, publicly-minded brand. Pandora has more to lose from supporting artists in the short term, but if it took the long view it would realize the benefits of such a brand reputation would do it far more good than the penny-pinching approach it currently adopts.