It's not. That's why Pandora is fighting for their life right now. They can't get big investors to keep backing them until they get the law changed. They're in very deep.
3,445 karma · joined September 28, 2010
If you divide total Pandora royalties by the number of artists in the catalog, you'll realize that these "unknown" artists they're showcasing are outliers by a huge margin, and probably put into rotation just for a publicity purpose like this.
edit: spelling
Why is $0.002 a fair price to pay each time you play a song? Where did that number come from? Why would Pandora pay this, but Sirius not?
When the largest, most efficient net broadcaster, after 11 years and over $300M in projected 2012 revenue, cannot optimize their way out of a -14% margin, what mathematical justification is there for this $0.002 figure?
The number is supposed to be based on a "willing seller, willing buyer" calculation based on the market rate of what companies are willing to pay, and yet the only rates that were allowed into these discussions were the mandated rates by the copyright royalty board - not the rates that independent labels might offer, or the companies that had royalty-free agreements, like ours (www.earbits.com).
You will be hard pressed to find a person more pro-artist than me, but the per-stream rate of $0.002 makes zero sense, if a per-stream rate makes any sense at all. Asking for neutrality across platforms seems more than fair.
The real reason the labels don't want to budge with Pandora is simple. The royalties go to SoundExchange, and then get distributed directly to artists - most of them unrecouped by their record labels. Labels want to destroy anybody whose royalties don't go through their accounting department, where they can file them away under unrecouped and keep every penny the artists deserve. That is the real reason for this battle.
On top of that, he said his party was "scrappy" by comparing it to that of a company who does more in revenue every month than the $30M his company raised in total. I would hope you'd spend less than a company bringing in near a billion dollars this year. It was still a massive waste of money, was off-putting to a ton of early adopters, and was just a large amount of lipstick on a pig, just as the marketing video they made was a cheap imitation of the innovative one by Dollar Shave Club.
I'm not sure if it's appropriate to keep touting Parker's startups as industry disruptions. Given their life cycles and profitability issues, perhaps interruptions is a more appropriate term.
Furthermore, the question the article asked is how much money do "bands" make from streaming, yet it only included a band that has a direct relationship. The bulk of bands on Spotify are put there by the major labels and one or two collectives of independent labels. The major labels setup the licensing structure such that the bulk of it is paid up front for a setup fee, and that fee is divided evenly among their artists, even though a small percentage of those artists constitute the bulk of the streaming. 95+% of the artists they include in that setup are not recouped, which means they haven't earned enough royalties to offset the "expenses" associated with releasing their album. The label keeps your money until you are recouped. So, the label shares nothing with 95% of the artists from this massive, tens-of-millions-of-dollars fee they charge. Then they pay 5% of the fee to their recouped artists - the megastars - even though those artists will generate 95% of the listening. After the setup fee, the per stream fee that gets paid to the artists is minuscule, and even much of that is swept under the rug during shady accounting.
And if that wasn't enough, the labels own 18% of Spotify (I've heard it's even protected against dilution) and will ultimately unload their stock on the public right before the licenses expire and they hike the rates up to an unsustainable level, drain all of the investment dollars out of the company, and start the cycle again.
The primary reasons are:
1. The average person eats pretty poorly, and would consider carrot sticks and fruit smoothies pretty crappy "free food" for an event. Cooking particularly healthy food that can pass as exciting for most people would be prohibitively expensive. Food ordered in bulk or made economically for a lot of people tends to be less healthy.
2. Drinking at networking events is "necessary" for most people who have a difficult time approaching and engaging with strangers without a little social lubricant. Plus, free drinks draws a crowd, whereas networking only partially does.
3. These events are often an opportunity for otherwise unsocial people to get out of the house, chat with others, and indulge a little. For some, particularly people with spouses and kids, it's the only time they get to drink more than a beer with dinner and not feel like they're doing something they shouldn't be. It's supposed to be as much fun as it is work, and eating pizza and drinking beer is fun.
As for the food being served at startups and the overeating it causes, that's just human nature. Let people eat whatever they want, and many will eat too much. Limit them, and they'll think less of your perk.
Then I got back to doing both but noticed something interesting. It wasn't usually the articles making me stressed and depressed, it was the comments. The comments on technology news these days generally sounds like they're coming from people I would never have a second conversation with. They're rude, negative, spiteful, discouraging, and depressing.
It's a very hard habit to break, reading the comments, and it's unfortunate because I used to find great tidbits of information in the comments that made them very useful and worthwhile. However, skimming past dozens of people talking shit and criticizing the do-ers just to get to the possible good information has proven not worthwhile.
I need to be more disciplined about avoiding this negativity.
Since then, I have recommended around 3 applicants to the YC partners. One did not get an interview despite over $100,000 in sales. One did and was rejected. The other was also rejected, and was recently acquired. Maybe I'm not the "connection" you're referring to, but from everything I've seen the application process is what they say it is. And then you have people like the OP who do enough to show that they are more remarkable than you thought.
It's also terribly inaccurate to say that "most technical people can, over time, "figure out the business stuff" to a far greater degree than most business people can "figure out the technical stuff". If "figuring it out" is akin to having a basic understanding, I think many great business founders have proven they can learn to code on a basic level. Similarly, developers may also learn the basics of business development, sales or fundraising by reading some articles. And, maybe one more than the other. But just as figuring out the basics of coding does not make you a valuable developer, learning the basics of business does not suddenly empower a person with the ability to ask the right questions, communicate clearly, create mutual value between partners, close a sale, negotiate terms, save a furious client, and so on.
Being moderate at any of these things does not a great founder, or company, make. Implying that techs can somehow become good at these things in droves, or easily at all, is drastically underestimating what a true business leader is capable of.
One thing I noticed missing is how frequently is too frequently to post. We started queuing up 8 posts a day at one point, one every three hours, and found that our Edgerank went down, and we got some unLikes. You might add some info about how much is too much to post.
This is also a bit different, since we're not a band, but we found that we got a higher response when posting content relevant to bands than we get when we post to consumers. It could be that we have a lot more musicians than regular music listeners, or it could be that our most engaged fans are the musicians. It might be worthwhile to give bands a "test plan" that will help them narrow down who, out of all of their fans, they should target the most.
If it stayed like that at just 10 times the scale, an artist could make $890 in net monthly profit, which is nothing short of a miracle for most musicians. At 100 times, a very attainable goal, it's a complete game changer.