Pandora Needs to Do Right By Artists

Not long ago, a high-powered entertainment lawyer called to ask if he could meet with me. He said he had some big ideas that would help my recording career, and my label. I thanked him and explained that I had a lawyer I liked, a label I loved and that I was quite happy. He was eager and insisted I would find it valuable. So I decided to grab some coffee with him.

It turned out he did have ideas. Unfortunately, each one was either something my label and I were already doing, had already tried, or had thought of but wouldn't want to do. After 10 minutes or so he got frustrated and said, "Okay, I can see now that for someone like you, it can't just be any kind of help. It's got to be the right kind." I replied, "Well, yes -- that's what help is."

If it isn't the right kind of help, then it isn't helping.

There's been a crescendo of national attention recently surrounding the statements and behavior of Internet radio giant Pandora and the company's founder and CSO, Tim Westergren. It's been in reaction to a series of positions the company and its founder have taken regarding royalty payments, and has ranged from disappointment to anger, from both music lovers and music makers alike. After an email exchange between Mr. Westergren and myself was published, the attention culminated with the surviving members of Pink Floyd courageously reuniting to pen an Op-ed on the questions and concerns of modern royalty fairness.

At the heart of everyone's concerns lies a common understanding that the royalty payments from radio, whether terrestrial (AM/FM), satellite, or Internet, are uneven and unfair. Everyone involved in the argument feels they're unfair, whether they feel they're paying too much, or getting too little. That's because terrestrial, satellite, and Internet radio each pay different rates. Mostly this is due to the near-century between the establishment of terrestrial radio and its satellite and Internet counterparts, and the birth of the entire music industry during that time.

Radio royalties can be challenging to parse, but they essentially fall into two categories. There's a royalty for the song itself, and there's a royalty for the performer of that recorded song. Satellite and Internet radio pay both. But because terrestrial radio was born in the 1920's and 30's when recordings weren't thought of as they are now (they were understood in fact as live performances, not recordings of them), it didn't pay a performer royalty at all. Terrestrial radio has never paid the performer royalty. And it still doesn't.

Mr. Westergren has often stated that Internet radio and Pandora in particular is being "discriminated against," because they have to pay the performer royalty and terrestrial radio, who he identifies as a competitor, does not. He has also recently stated that "Pandora is a company founded by artists to help artists. It is at the core of who we are and how we make decisions about our business and that will never change."

Then help us. With the right kind of help.

Instead of lobbying Congress (as you have) to lower Pandora's rates, honor the rates Pandora, artists, and labels agreed upon together for Internet radio hand-in-hand with Congress in 2009. It's an agreement artists went into with you in good faith, that already dramatically lowered the rates Pandora had to pay. It's an agreement Mr. Westergren himself applauded at the time, famously and happily announcing on his own blog, "the royalty crisis is over!" It was also an agreement we were all supposed to continue honoring together, until 2015.

Instead of taking provocative action and purchasing a tiny radio station in the country's 255th largest market (as you just did in an attempt to qualify as a terrestrial radio company and not have to pay a performer royalty), take different, provocative action. Stand with music lovers and music makers in reasonably and rationally arguing that terrestrial radio has never paid its fair share, and it's time it did. And then to show you mean it, sell that station.

Instead of claiming that artists like myself who have expressed disappointment in Pandora are being manipulated by our own performance rights organizations, understand that this is the smartest, best educated, best informed, most resourceful generation of musicians in this country's history, and we know fairness when we see it.

Mr. Westergren says his company exists to help artists. He and Pandora have the opportunity to be the champions they say they want to be. It's time we called on the better angels of their nature to do what's right. It can't be just any help, it has to be the right kind. Because that's what help is.

Blake Morgan is a recording artist, producer, and label owner in NYC.