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Internet radio is one of those budding industries which is still not very populated and contains only a few contenders. Probably the most well-known among them is Pandora, which has a huge user base and brings content from thousands of artists straight to the listeners. Now, the company has revealed what amounts it usually pays to the artists whose content is played on its online radio.

Pandora has made the move because recently, a number of critics has slammed the service as useless, going so far as to say that it doesn’t bring artists any payback for using their content. The company has now revealed that it pays very substantial amounts to the artists, contrary to the claims of the critics.

In a statement released by the company’s chief strategy officer, “For over two thousand artists, Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we’ll pay over $50,000, more than the income of the average American household. We’re talking here about the very real possibility of creating, for the first time ever, an actual musicians middle class.”

While that remains the paycheck that rather little-known artists take home, the renowned artists take an even greater bite of the cake. Coldplay, for instance, is paid more than a million dollars each year by Pandora while Lil Wayne gets nearly $3 million a year.

These figures go on to show that Pandora’s model of online music radio seems to be incredibly successful and workable. And the company is right in claiming that “internet radio presents an incredible opportunity to build a better future for artists. Not only is it bringing tens of millions of listeners back to music, across hundreds of genres, but it is also enabling musicians to earn a living.”

Pandora’s attempts at proving the viability of its business model stems from the need to show Congress that it is a worthy player in the online content arena. Congress is currently deliberating on the Internet Radio Fairness Act which, if passed in its current state, will be majorly beneficial to Pandora because it would trim down the royalty costs that online music-streaming services must pay for their content.

Naturally, this would not sit well with the content industry but then, Pandora’s founder presents a rather compelling argument, “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.”

Source: Pandora

Courtesy: Mashable

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