07.30.13

The thefting economy: There’s an app for that

Posted in Culture of Lickspittle at 3:49 pm by George Smith

The sharing economy: American tech industry euphemism for the creation of an economy in which the top 1 percent gets all the share.

From the web, statistics on the sharing economy and Pandora’s royalty payment schedule:

David Lowery, of bands like Cracker and Camper Van Beethoven, is an outspoken critic of Pandora and other services that use so-called compulsory licenses to broadcast music over the Internet.

The idea of compulsory licenses is set out in U.S. copyright law, and it basically allows Pandora and similar services to stream just about any song they want so long as they pay a fixed royalty on each song. Pandora has argued that it is losing money because these royalties are too high, while songwriters like Lowery say they are only making a pittance from the royalties.

In an effort to demonstrate his side of the argument, Lowery has revealed his recent royalty payments for the 1994 Cracker hit “Low.”

Records show that in the last quarter, the song was streamed around 1.16 million times on Pandora, for which the band splits $42.25 in songwriting royalties. Lowery’s share is $16.89. So he earned about $.000015 per play of the song on Pandora.

The article goes on to mention that while one million plays is a lot, it is not similar to the model of traditional radio — which pays much higher royalties — where a single play can reach many, even millions, of listeners.

This is true. But virtually zero percent of any number, large or small, is still virtually zero. And this business model, at its rate of payment, constitutes theft.

Lowery argues that it’s not the artists’ fault that Pandora is not a profitable business.

Last week, here, I mentioned that Spotify, another streaming music service, pays half a cent a tune.

The repeated lesson from the sharing economy is now crystal clear:

The owners of capital make all the swag from the tools of digital distribution … The magic of the corporate technological revolution is that it does not result in progress. The software applications merely make the collection of monopoly rents on content production globally efficient. Simply by holding the distribution networks and applications, remuneration can be reduced to record low levels …

Google is already in the music-streaming business and Apple will follow.

None of these giant globe-spanning companies engage in artist discovery or development. That risk is pushed onto all those dragooned into furnishing musical content for them.

I share David Lowery’s contempt for the Internet economy of digital music. It’s one of the worst examples of how digital progress, used the wrong way, has made a winner-take-all society. I would applaud if Pandora (as well as Spotify et al) were destroyed.

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