Do Music Services like Pandora Pay Little or No Royalties to Second Cuts of Hit Songs?

Contrary to a recent point of contention, music streaming services such as Pandora and others do indeed pay royalties for all song versions. However, the distribution of these royalties is different for original recordings compared to covers. When an artist, say Taylor Swift, covers a hit song and posts it on streaming platforms, half the royalties are allocated to the original songwriter, and the other half to the covering artist. This has been the standard practice in the industry for a considerable time.

The core issue is not a lack of payment but rather a discrepancy in the total royalties, as these can add up significantly for major artists like Taylor Swift. For instance, while an original song might earn a much smaller per-stream royalty, when it comes to the cover, both parties benefit from the distribution. This dynamic can be crucial in understanding the financial landscape of modern music streaming.

In light of this, many artists and industry experts are advocating for fairer and more transparent distribution models. This includes the need for direct payment to songwriters and composers beyond just what is allotted to performing artists.

The State of Streaming Royalties Today

As of the latest updates, most traditional streaming services, including Pandora, Spotify, and Apple Music, adhere to a standard model for royalties. These platforms typically pay around 0.003 cents per stream for an original song. When a cover of the same song is uploaded, the royalty rate remains the same, but it is split between the original songwriter and the cover artist, effectively doubling the royalty payment for the cover version.

Some artists, however, have found alternative solutions that offer more favorable terms. One such platform is the Jaxsta network, which is run by musicians for musicians. It operates on a blockchain-based model, ensuring that artists and songwriters are paid promptly and transparently in the form of etherum (ETH). This platform can be particularly beneficial for independent artists who seek a more equitable distribution of royalties.

For instance, a minor artist may generate more revenue on Jaxsta with a single track than they do across multiple traditional platforms due to the direct payment model. While the total number of streams might be lower, the direct compensation can be significantly higher, making it a viable option for artists looking to maximize their earnings.

Alternative Platforms for Better Royalties

Jaxsta stands out as a platform that offers transparent and direct payment methods. Unlike traditional streaming services, Jaxsta ensures that creators and songwriters are paid immediately upon the streams occurring. This direct payment system has been particularly appealing to emerging and independent artists who are often overlooked by larger platforms.

I recently experienced this difference firsthand. I released a rare track through a distributor and placed it on numerous major streaming platforms. Despite achieving over a million streams, I only earned less than ￡10. This revenue was significantly lower even when compared to the more plays I received via Jaxsta. By pushing the same track to Jaxsta, a single platform with approximately 1,000 plays, I earned ￡22. This direct payment model provides a stark contrast to the fragmented revenue model of traditional streaming services.

This example underscores the importance of exploring alternative platforms that offer more equitable share structures. For independent artists, leveraging platforms like Jaxsta can be a game-changer in terms of revenue generation and financial stability. It is crucial for artists to familiarize themselves with various options available to ensure they receive the best possible compensation for their work.

Conclusion

While traditional music streaming services such as Pandora do pay royalties, the distribution and rates can vary significantly, especially when dealing with covers. For artists, particularly those with hit covers, the traditional model can still be lucrative. However, for independent and emerging artists, exploring alternative platforms like Jaxsta can offer more direct and equitable compensation.