By Jon Healey
3:45 PM PST, January 10, 2013
Speaking to a room full of technology executives and policymakers, Pandora founder Tim Westergren pitched his online radio service as a ladder into the middle class for working musicians.
This was the same Westergren who has drawn intense flak from artists and labels for urging Congress to adopt a less generous formula for the royalties webcasters such as Pandora pay. Congress held hearings last fall on the bill Westergren is championing (the "Internet Radio Fairness Act"), but the measure hasn't made much progress toward becoming law.
Westergren was the keynote speaker at the Leaders in Technology dinner Wednesday, an annual event at the Consumer Electronics Show in Las Vegas. And considering that the crowd was chock full of people sympathetic to the idea of paying less for content -- it was, after all, the consumer electronics industry -- Westergren had a golden opportunity to build support for the Internet bill.
He didn't even bring it up. Instead, he talked about Internet radio as a means to generate income for performing artists (who don't get paid at all by over-the-air stations) and insights. In particular, he touted Pandora's ability to help artists figure out where to tour and promote their live shows to a receptive audience.
The key, Westergren said, is in the feedback Pandora users give on songs. The site allows listeners to give a thumbs up to songs they'd like to hear more frequently in their personalized radio feeds, and a thumbs down to those they don't. This feedback can help identify the people most interested in going to an artist's concert.
Westergren said he could see allowing artists to log into Pandora to see a heat map of the thumbs up ratings, showing the areas where they had the largest number of potential fans (but not their identities). Artists could also enter their tour information into the site, and Pandora could send alerts to listeners who'd given those bands' songs a thumbs up -- along with the option to buy tickets with one click.
Combine that sort of audience-finding intelligence with the royalties generated by a popular online radio site, Westergren said, and you have "the makings of a really robust music industry."
There are plenty of other sites trying to help match artists to their fans across the country (and the world), but few, if any, have an audience the size of Pandora's 60 million active users. The company has been wildly successful in attracting listeners to its free stations; what it hasn't yet figured out is how to make much of a profit off of the advertising it sells.
That's why Westergren has been so interested in obtaining a lower royalty rate, which he argues is essential not just to Pandora, but to the entire webcasting industry. Lower royalty rates would translate into more webcasters, more listeners, more advertising dollars and, yes, more royalties, Westergren contends. His critics in the music industry respond that he's just trying to reduce artists' paychecks for the sake of his own profit margin.
The pushback from the industry stung Westergren, who once aspired to be a professional musician. If he really wants to improve his bona fides with artists, though, he'll need to translate ideas like the one he floated Wednesday into actual services.
Healey writes editorials for The Times. Follow him on Twitter @jcahealey
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