Pandora Actually Pays $1,300 for a Million Plays Not 16 Bucks

Math! It can solve a lot of problems. It can be made deliberately fuzzy. It can help us break down complicated things. Like artist music royalties from streaming music stations. When David Lowery revealed that Pandora paid him only $16 for 1 million plays, there was an outrage. But some deeper math reveals that Pandora might actually pay a lot more than that.

Whip smart writer Michael Degusta put a bunch of numbers together like which royalties go where, what percentage goes to the songwriter as opposed to the publisher and calculated the performance royalty to come up with the number actually paid for 1 million streams on Pandora. His math figured that:

  • Pandora paid a total of about $1,370.
  • The band received a total of about $585.
  • If Lowery received 40% of the performance royalty, “all he got" for the 1 million plays was in fact around $234.

The total for the entire song is a good amount of money (or okay-ish depending on your perspective) but the total that Lowery received for the song isn't exactly rock star material. It's better than 16 bucks to be sure but still not exactly sustainable income.

How did Degusta come to this math? The biggest chunk of it was in a royalty for the performance itself (and not the songwriting royalty). That performance royalty was $0.0011 per streamed song and for 1,159,000 streamed song, the math works to $1274.90 (it should be noted that this royalty gets split with the label, bandmates, etc.). So maybe the performer of the song gets a bit of money but the songwriter still definitely gets stiffed. The total songwriting royalty was a $42.23 payment. Party on.

You can read more of the math at Michael Degusta's The Understatement. Spurred by this discussion, co-founder of Pandora Tim Westergren also released a statement about how much they pay artists. [The Understatement, Pandora]