Westergren Says Treat Us Fairly

6-6-2012

Pandora founder Tim Westergren made his case to level the out-of-whack royalty playing field at "The Future of Audio" hearing on Capital Hill Wednesday. Not only did Westergren tell lawmakers about the hefty fees Pandora has to shell out to play music, he took a shot at how radio doesn't pay anything, and he wants those rules changed. 

READ ALL OF WESTERGREN'S TESTIMONY HERE

Westergren said, ?Last year, on revenues of $274MM, Pandora paid $137MM in performance fees to performing artists and labels, or 50 percent of revenue. That same year, Sirius/XM, on revenues of $2.74B, paid $205MM, or 7.5 percent of revenue; and broadcast radio, on revenues of roughly $15B, paid zero. It is time for Congress to level the playing field and to approach radio royalties in a technology neutral manner."

Westergren said, "the current rate-setting law is unfair to performing artists, unfair to record labels, and unfair to Pandora and internet radio as we compete every day with broadcast radio and satellite radio for listener loyalty and advertising and subscription revenue. America?s obligations to our performers should be shared proportionally by all who use their music.  What amounts to a subsidy of entrenched radio media stifles innovation, discriminates against the internet and adversely affects consumers.  It is time to unshackle innovation and allow new technologies and new forms of audio consumption to compete fairly.?

(6/7/2012 12:50:20 AM)
I agree that it should be consistant across the board. This is not Pandora's issue though. There is a rate that is paid per song play. The amount paid is not about percentages of revenue, so the 50% vs 7.5% argument is pointless. Pandora's revenue does not keep up with their cost. Pandora has always been a broken business model. Always will be.
(6/6/2012 10:17:52 PM)
Tim Westergren knew the rules when he entered the gsme. Cost of doing business, Tim. Why should the rules be changed just because your business model leaves no chance for profit?

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Does PPM Fairly Measure Hispanics

In our continuing series on the PPM, today we hear from Jay Meyers, CEO of Adelante Media Group. Adelante owns and operates radio stations in nine Hispanic markets and specializes in Spanish Language formats. Meyers says PPM for the Hispanic audience is a mixed bag. "The ratings transitioned rather evenly in our markets back in 09 compared to many companies. The real issue has been sometimes wild swings around panel changes, where we often find the number of meters in use for not only our stations, but for our sector (Spanish language) dropping 20% or more. With Hispanics emerging as significant portions of the population in many markets that are outside the traditional mindset (Salt Lake City, Seattle, Milwaukee), meters have not kept up with the growth."

In Seattle for instance, Meyers says, the census has shown a significant growth in Hispanics, now over 10% and yet the cume for all Hispanic stations has dropped by 40% in the last six months. We can trace it directly to panel changes.

Do you believe your audience is being rated fairly?
Fair is a relative term. I don't feel my audience is treated unfairly, but I do think that a far better job could be done to in placing meters to create a more statistically balanced sample. Spanish language radio stations should be exploding along with the population. But with a lack of language weighting in most markets, with fifth generation Bernie Gonzalez being thought of the same way as first generation Julio Gonzalez, there are clearly issues that Arbitron will need to address to be more effective in reflecting true listening shares.

Do you do anything different/special etc programming wise to try to address the PPM world?
Sure, we've studied things hard. The ability to get ratings is the ability to understand and use the measurement system to your advantage. In Sacramento we've done commercial free Mondays on Latino and that has helped propel the station to number one Hispanic 18-49. On our regional Mexican we've gone to ten in a row every hour and that has helped us grow. On the other hand, we've affiliated in a number of our markets with Piolin, the number one Spanish syndicated morning show and that has shown great growth in the PPM markets, which is contrary to standard thinking.

Is the industry better off now that PPM is the standard for measurement - and revenue?
Regardless of your opinion of PPM, the answer to this question is that we are better off with PPM, and anyone who thinks we're not has their head in the sand. You have to start with one cold hard fact, the electronic measurement horse for traditional media left the barn 8-10 years ago. Radio is late to the party and we're playing catch up. Add in the ability to measure clicks and page views that are part of everyday life, and a medium that doesn't have electronic measuring is a medium that cannot compete. PPM should have rolled out a half decade before it actually did. We dug in our feet because of a dislike or distrust of Arbitron. Classic don't shoot the messenger scenario. Hindsight is 20/20, but in hindsight this industry should have gotten together with Arbitron and worked from the inside, collaboratively to get PPM rolled out faster instead of slowing it down by sniping in the press or making noise about pursuing alternatives. Instead of bitching we should be pushing them to continue to explore how to make the device more efficient yet cheaper (my first Mac plus with all the accessories cost 4800 bucks 25 years ago, an ipad can cost as little as 400 bucks) so we can roll PPM into more and more markets.

It?s a far better measuring device.......seriously, does anyone really think that a 33 year old female arrived at the office at 8am and listened to the A/C station straight through to 5pm as the legendary diary arrow would indicate? No bathroom breaks, no going out to lunch, no conference room meetings? The flaws in PPM (being 'exposed" rather than choosing to listen) are far outweighed by the benefits of actual electronic measurement.

Regarding revenue, that's hard to say. The decline since PPM cannot be viewed in a vacuum. We've had a tough economy, an industry that is still struggling to get to pre 2008 levels, and new media competition that has all come on the scene during the transition. Who knows where we'd be if we were trying to sell an industry based on recall and paper diaries in the largest markets in 2011. Chances are we'd be in a worse situation.

(7/28/2011 10:59:43 AM)
Its refreshing to see an actual group head speak frankly and honestly and pull no punches instead of the typical nonsense and spin that comes from the the people you usually quote

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