Streaming, Royalties, and Collection: Here we go again

We have seen many, many complaints, arguments, and commentary on the royalties paid out from streaming and distribution services, iTunes and Spotify being good examples. However, Pandora is the one who is currently pushing the envelope by trying to get regular people together to fight royalty rates they don't feel they should have to pay. I read a fantastic article on this exact topic just a couple of days ago on Billboard. The editorial by Justin Kalifowitz, president of Downtown Publishing, as well as co-founder and CEO of Songtrust "presents a perspective from the publishing and songwriting communities.”

Mr. Kalifowitz makes great points and backs them up with analytical data. For example, it is Pandora's choice and the basic fabric of their business plan to allow very little advertising and "protect their listeners." But while Pandora is trying to get the rates on royalties they have to pay down, as these add heavily to their costs with no advertising dollars for cushion, they are already "paying the lowest ratio of artist and songwriter royalties than any other income type in the music business." In the same article they show that according to the National Music Publisher's Association, for every dollar Pandora pays to labels and artists they pay just 8 cents to songwriters and music publishers.There is some perspective offered in this article as well. 

Remember I mentioned iTunes and Spotify caused a lot of commentary? Well this article shows that compared to that 8-cent payment from Pandora, iTunes and Spotify pay out 15 and 17.6 cents, respectively, to songwriters and publishers for every dollar paid to artists and labels. Further, and more impressive, YouTube shows a ratio of 42 cents and satellite radio at 50 cents to the dollar. One opinion of Mr. Kalifowitz is that the problem is simply leverage, and I tend to agree with him. 

I also agree that if Pandora insists on sticking to the existing business plan and not making alterations for Fair Play, then "music publisher's and songwriters should demand a more equitable split…" They certainly don't deserve any kind of "bailout" in the form of royalty rate reduction from congress.