RAIN 10/10: In appeal to artists, Pandora founder Westergren "shows 'em the money"

Paul Maloney
October 10, 2012 - 12:00pm

As it's done so well in the past, leading webcaster Pandora is showing an expert's edge in gathering support among its listeners and their representatives in Congress for the newly-introduced Internet Radio Fairness Act. Now, in his blog, Pandora founder Tim Westergren makes the case that a healthy, thriving Pandora is important for the future viability of artists.

Westergren reveals that his service in 2012 will pay $100,228, $138,567 and $114,192, respectively, in royalties for the use of music by Donnie McClurkin, French Montana, and Grupo Bryndis.

"They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively," Westergren wrote. "These are all working artists who live well outside the mainstream - no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora."

He also reveals that his service will pay nearly $3 million each in royalties to play the music of performers Drake and Lil Wayne; for Coldplay, Adele, Wiz Khalifa, and Jason Aldean, it's more than a million dollars each.

"For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months... and for more than 800 we'll pay over $50,000, more than the income of the average American household."

Further, he cites research from the NPD Group that concludes that Internet radio has a positive effect on both music sales and curtailing music piracy.

While record label-, artist-, and performer-lobby groups and unions like musicFIRST, AFTRA, and the AFM have publicly spoken against the IRFA, it's clear Westergren is looking to appeal to the actual artist members to support royalty reform.

"Making performance fees fair for Internet radio will drive massive investment in the space, accelerating the growth of the overall sector, and just as importantly accelerating the development of new technology that leverages the incredible power of the Internet to build and activate new audiences. That's where the great opportunity lies in the long run. The short-term reduction in revenue would be rapidly swamped by the overall growth of the sector. Imagine the impact on artists if this industry grew to become 25% or even 50% of radio listening," he concludes. "Artists, this is your future. Own it."

Read Westergren's blog here. Business Insider has coverage here

Paul Maloney
October 10, 2012 - 12:00pm

Though the French media stole some of the thunder from Deezer's planned announcement today (see RAIN here), revealing its $130 million in new funding over the weekend, there was plenty of bang left for today's reveal.

The on-demand music service today announced it will expand to 76 additional countries throughout Africa, the Middle East and Asia (what TechCrunch calls the "everywhere but the U.S." strategy), and will add a "marketing-driven free version of the service" while "ramping up its social features significantly."

The global expansion will bring Deezer’s geographical reach to 160 countries worldwide. Deezer has no plans for the U.S. market, where "customer acquisition costs are high and market conditions do not currently allow for sustainable expansion."

Deezer CEO Axel Dauchez revealed the details at a press conference held at Abbey Road Studios in London earlier today.

The new Deezer free service "will be a recruitment channel to encourage users to convert to a paid subscription ('rather than a model in of itself,' says the company). Furthermore, it will be tailored for each individual country 'according to the competition,' presumably in terms of number of listening hours permitted and that type of thing," TechCrunch reports.

Deezer is also the newest client for music intelligence service The Echo Nest. Deezer will use The Echo Nest's Rosetta Stone 30-million song dataset. Hypebot describes Rosetta Stone as "a data translator for music services that allows developers to summon elements from a variety of sources to include in their apps."

Read more in TechCrunch here; MusicWeek here; and HypeBot here.

Paul Maloney
October 10, 2012 - 12:05pm

RAIN publisher Kurt Hanson will make the first presentation this afternoon at the IAB Digital Audio Agency Day, here in Chicago. Hanson will give a twenty-minute version of his "The Future of Radio" address before the afternoon's first panel discussion. (Hear the full version of Kurt's "State of the Industry" address on SoundCloud here, or look for the link in the right-hand margin of RAIN.) 

The first of the day's two panels is "Streaming Audio Consumer Experience & Advertiser Environments," moderated by former Katz 360 Sales President Brian Benedik, with AdLarge CRO Eric Ronning, Pandora Regional VP/Sales Gabe Tartaglia, and CBS Local Online president (and recipient of the 2012 Triton Digital RAINMaker Award at RAIN Summit Dallas) Ezra Kucharz.

The second panel, "Beyond the :30 Spot," features Starcom VP/Media Director Cecilia Bizon, Walgreens Director, Media Services Christine Kubisztal, and Luna CMO Jason Pruismann, and will be moderated by Pandora VP/Audio Sales Doug Sterne. Triton Digital COO Mike Agovino will make a presentation called "By the Numbers: State of Online Audio," followed by TargetSpot VP/Marketing Amy Becker, whose speech is called "Digital Audio & the Multicultural Audience," and Colleen Fahey (who is founder and principal of The Idea Haven) on "Audio Branding."

IAB VP Michael Theodore (a RAIN Summit veteran) will host the event at the famous Tribune Building.