I try to stay out of the way of deep discussion on the topic of performance royalties for Internet radio. I think there are several people who know more about it that are covering it well, and there’s usually lots of other stuff to write about. But this story last week caught my eye, so I wanted to pass it along. The royalties that Pandora is paying now account for 44-45% of all the performance royalties that SoundExchange is collecting for non-interactive streams.
“We’re about 44 percent of internet radio,” Pandora Founder Tim Westergren told Digital Music News.
As you may be aware, I champion Pandora’s success. They have — in a relatively short period of time — built a very popular brand and amassed a huge audience. Their approach has been dedicated and deliberate in providing a super listener experience and honoring the artists they play. I think this approach has gained them a gold star rating from listeners that has fostered their growth. Just try mentioning Internet radio at a cocktail party and see what comes back at you — everyone talks about Pandora. (yep, including me…)
Last year Pandora began taking significant steps toward developing revenues with the same dedication and deliberation. They added some cross platform display ad features, some video ad opportunities, and some audio ads. That made me happy — I wanted to see Pandora contribute to building the business model by selling ads, especially audio ads.
If you’re in the business of Internet radio I think you can go to school on the way Westergren and CEO Kennedy have built their brand. Along the way, I think they have contributed significantly to the growth of the whole online radio audience and benefited the industry.