The Reality of the Music Business Today: 1 Million Plays = $16.89

Musician indignant that free radio station does not make him rich
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"My Song Got Played On Pandora 1 Million Times and All I Got Was $16.89" is the eye-catching headline by David Lowery, a musician who wrote "Low," which is earning him just over a thousandth of a cent per Internet radio play.

Which is the law. The Library of Congress Copyright Royalty Board decides how much Internet radio companies like Pandora must pay artists like Lowery. And even that microscopic number is high enough that Pandora, which earns 80 percent of its revenue from digital advertising, has lost money in five of the last six quarters.

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"Pandora is barely giving anything of worth for using the songwriters and artists' music," Gizmodo writer Casey Chan points out. Which is true. But ironic, since it was just four years ago that Gizmodo writer Sean Fallon pointed out, also correctly, that "excessive royalty rates were the main reason sites like Pandora hovered near the brink of collapse [in 2008]."

We all want our favorite musicians to be rich and also would prefer to pay nothing to listen to them over the Internet. When we hear that our musicians aren't rich, we feel indignant. When our Internet music sites threaten to close down because of "excessive royalty rates," we feel indignant. 

The solution is to abandon all hope ye who enter the Internet as a means of making a million dollars with streaming music. Even if Pandora quadrupled the royalty rates paid to Lowery, it'd barely pay for three days rent. If you want to pay a musician, there is an easy fix. Go to a concert. 

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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