FM Broadcasters Are Freaking Out About Pandora

FM Broadcasters Are Freaking Out About Pandora.

That’s the title of a story that appeared on both Business Insider and Huffington Post, two aggressive aggregator web sites with large audiences.

The title gives the impression that the story is about what FM broadcasters are thinking, but that’s just a come-on.

The story is actually a sloppy rewrite of a single radio trade story on the recent Pandora investor’s meeting. Nothing original, nothing insightful. A Pandora puff piece that has nothing to do with broadcaster reaction to Pandora.

Worse than that, it horribly distorts the few facts it offers.

The title stems from a quote in the original trade story attributed to Pandora executive John Trimble during the meeting:

While that pie (the $37 billion radio advertising pie) is not growing, we see it as an opportunity.

The hack writer then embellishes the misstatement by declaring:

FM radio stations claim $37 billion per year from advertisers--a number of which the now-public Pandora is all too aware, with worrisome implications for FM broadcasters.

According to the RAB total commercial broadcast revenue last year was $17.3 billion. If radio really had $37 billion to divvy up, there would be plenty left over for Pandora.

So we wondered whether Trimble got it wrong, or the story that followed did. We looked at the original Pandora PowerPoint presentation (click to enlarge).

It turns out that the $37 billion number refers to the total of Internet, mobile, and radio advertising projected for 2014 in the US.

The radio trade botched the quote, and our intrepid plagiarist writer didn’t bother to go back to the original source. He simply recited the misstated number while further distorting the significance.

The distortions don’t end there, however. Hewing to the official Pandora line, the writer notes:

Unlike Pandora or satellite radio, it (broadcast) owes no royalties to SoundExchange or any other agency. The U.S., North Korea, Iran, Rwanda, and China let radio stations play music without paying performance royalties to songwriters and musicians.

We’re sure he got quite a chuckle comparing broadcast radio to North Korea, Iran, and Rwanda.

Of course, radio does pay royalties to songwriters, just not performers. And Pandora’s negotiated royalty rate is well below Sirius, depriving starving performers millions of dollars.

This is what passes for new-media journalism today.

Take as big of a swing at radio as you want, say anything derogatory whether it is true or not, and it will be published, even by some of the biggest web sites around.

The hack author, Eliot Van Buskirk, is described this way:

A longtime technology writer for Evolver.fm, CNET, Wired and other publications, two-time book author, and frequent guest on NPR.

If the truth and accuracy standards set by these media allows Van Buskirk to write such trash, then it is a sad commentary on the quality of new-media discourse.

And what are his two books? Burning down the house: ripping, recording, remixing, and more, and the equally famous iPod and iTunes Quicksteps.

Those books alone certainly qualify him to pontificate on Pandora’s threat to broadcast radio.

 

Comments

[Paul]

Okay, more on this: "Pandora’s negotiated royalty rate is well below Sirius, depriving starving performers millions of dollars."

More accurately, Pandora's negotiated streaming rate is below the rate Sirius pays *FOR ITS INTERNET STREAMING*. The rate at which Sirius pays for the music it plays on its satellite-delivered programming (which is how the vast majority of Sirius listening occurs) is actually *just 6%-8% of its revenue*. (see second-to-last paragraph here: http://tinyurl.com/l3cn2x)

Pandora pays *the higher* of its "per-performance" rate or *25% of the gross revenue of their entire business* (you can read that here: http://tinyurl.com/489lxcm). In its IPO filing, Pandora revealed it had actually paid *more than half (50.4%)* of its year-2010 revenues for content licensing. (that's here: http://tinyurl.com/3atamtu)

What's more, from 2007-Oct 2010, Pandora paid well over $100 million to SoundExchange and publishers.

Bottom line: to imply that Pandora pays royalties at a rate far below Sirius (for the vast majority of its listening), and to claim that Pandora is "depriving starving performers of millions of dollars," is misleading and *wildly inaccurate*.

On the note of inaccuracy, the charge of plagiarism against Van Buskirk is nonsensical, given the widely-accepted definition of that word. Van Buskirk quite clearly attributes the original source, and is very obviously reporting and commenting on the piece. That's not plagiarism in any sense.

[If anything, Van Buskirk seems to have swiped the "North Korea, Iran, Rwanda and China" line from the record industry in its grab for recording copyright royalties from AM/FM radio.]

[Ken]

"Of course, radio does pay royalties to songwriters, just not performers."

And, by this, U.S. radio follows the only other countries that do not pay performers: North Korea, Iran, Rwanda, and China.

[Paul Maloney]

"Pandora’s negotiated royalty rate is well below Sirius, depriving starving performers millions of dollars."

Source, please?