Streaming radio service Pandora has paid out around $500m in royalties in the last year, based on the company’s latest milestone. Having reached $1bn of total royalty payments in October 2014, yesterday the company confirmed that figure has now passed $1.5bn.
Alongside the milestone came a Billboard op-ed from chief executive Brian McAndrews defending the merits of free streaming services. “The real definition of free is far more nuanced. And what is not fully appreciated is that ‘free’, or more accurately, ‘ad-supported / free to the listener’ opens up tremendous opportunity for the music industry,” wrote McAndrews, noting that 80% of Pandora’s $1.5bn royalty payments were generated by advertising on its free tier.
“All evidence indicates that the overwhelming majority of Americans cannot, or will not, pay a monthly music subscription fee,” he continued. “Those listeners don’t value music any less, nor do they intend to steal it; in fact, legal services like Pandora play an important role in significantly reducing piracy. It simply means we need a different model to serve this massive audience.”
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