Total reach for commercial radio per week is: 31,230,000.
Average hours per listener (per week): 14.10
The two multiply together to be 440,343,000.

That’s where the 441,457,000 figure comes from (the difference is caused by rounding-down the figures we see in the spreadsheet).

Alternatively, you can work backwards from your figures; if the weekly reach is correct (31,230,000) and the total hours are 441,457 per week, then commercial radio manages to get 0.014 hours per listener a week. That means that people listen to commercial radio for an average of 50 seconds a week. Even I know that’s not true!

According to RAJAR, all commercial stations had 441,457 total listener hours per week, not 441million (441,457,000)

Which I fear may make your calculations off by a factor of 10. Meaning, revenue of 25.7 pence per listener hour, rather than 2.57

Pandora charge a flat $9 per 3 months subscription. That’s only £1.50 per month with the current exchange rate.

I would be content with paying $9 per month to continue using the Pandora service, or maybe even a pay-as-you-listen scheme would be more appropriate.

You still owe me £5, however.

P

I’d echo some of the comments made by the great and good. The music industry’s inability to pull its’ head out of its’ rear end with regard to new forms of distribution only echoes times past - like charging artists mechanical royalties for CDs based on cassette duplication costs (like it costs the same to make a CD…). Ultimately they’ll pull themselves down like dinosaurs in an ice age, and hopefully something more flexible will gradually spring up in its place.

I’ll be the one playing some danceable stuff on bass down the pub.

Thanks again

Andy W

Paul

FYI Pandora users have set up a petition at No.10 to draw more media attention to this issue.

Here’s the link:

http://petitions.pm.gov.uk/SaveNetRadioUK/

Thanks again!

However, the PPL rate is actually higher than that and have been made public in PPL’s press release (check out their site www.ppluk.com - news: response to Pandora announcement).

The per track rate put to us and all internet radio businesses by PPL for what they describe as “interactive” internet radio/webcasting is NOT 0.0561p per track. It is 0.0773p per track.

So, on your calculation:
MCPS/PRS @ 0.085p per track x 15 tracks per hour = 1.275p per hour of music played
PPL @ 0.0773p per track x 15 tracks per hour = 1.159p per hour of music.

The figure payable for every hour of music played = 2.434pence.

On your commercial radio rate of 2.57p per hour per listener that is 94% of gross revenue!

You have worked in radio (both broadcast and online areas) so you know the numbers as well as anyone. Even if internet radio were to push this a little higher, lets say as high as 3p per listener hour, after serious investment and hard working ad sales teams/agencies doing their thing…these rates would equate to 81% of Pandora’s and any other webcasters gross revenues.

No business out there, if it actually wants to make revenues and return any value to shareholders can make it work on those numbers in the near, mid or long term.

There is no subtext or catch here…if we could do it we would not be turning off.

Thanks and hope that is clear enough!

Paul
(Pandora, MD International)

“As we said back at the start of 2007, the current first generation of ad supported services will need to have more competitive licenses if they are to have long term economic viability. The irony here is that Pandora is facing licensing issues just as the major labels are becoming more open to next-gen offerings like Pandora. However they appear to remain cautious enough to either demand large fees or do things in a half hearted manner (see SonyBMG’s bizarre implementation of DRM-free). So does this mean that if you are a next-gen service your chances of success depend on the depth of your pockets and your willingness to implement non-sustainable operating margins? If so that skews the rates of success to:

• VC funded companies with the mid-term goal of acquisition
• Big companies with ulterior business aims which can subsidize costs (device manufacturers, telcos etc.).

If so that would be a shame and would be replicating some of the key mistakes that were made in the early phases of the digital music market.”

Therefore ‘traditional’ radio stations pay considerably less for the right to broadcast music - especially as they are not being charged on a ‘pay per play’ basis.

Net Broadcast Revenue is defined thus:

· taking 85% of the gross valuable consideration (before any deduction of agency commissions or any other deductions) whether in money or money’s worth, and where applicable taking the Notional Value of airtime in place of the actual consideration (including nil) for that airtime, derived and received by the Licensee (or any person, firm, company or entity which is a member, associate, subsidiary or agent of the Licensee) from Broadcasts transmitted, Cable Simulcast Services sent and/or Internet Simulcast Services sent pursuant to this Licence including without limitation and by way of example only advertising, donation, Sponsorship, Barter and Contra Deals and banner adverts on media players and pop up windows associated with media players (save where the content on the media player is not an Internet Simulcast Service); and then

· deducting external costs directly and reasonably incurred by the Licensee in producing sponsored Outside Broadcast events PROVIDED THAT if such costs of an Outside Broadcast event exceed the value of the Sponsorship revenue for that event the Sponsorship revenue shall be nil. The amount by which such costs exceed Sponsorship revenue may not be set off against Sponsorship revenue from any other Outside Broadcast event or other non-Sponsorship revenue.
For the avoidance of doubt where any third party derives and receives gross valuable consideration (as defined above) in respect of advertising or Sponsorship revenue from Broadcasts transmitted, Cable Simulcast Services sent and/or Internet Simulcast Services sent pursuant to this Licence it shall be deemed to be derived and received by the Licensee.

Indeed, it is insanely expensive in terms of what advertising revenue is available for online radio, and then the costs involved in running it. 82% [edit - it's now higher than that - JC] of revenues generated is an accurate reflection of what the music industry seems to think they are entitled to, but on the flip side, in what other sector of business would this be acceptable?? I feel none.

Here’s the bombshell…. I have on several occasions, as I’m sure others have, attempted to lobby MCPS/PRS alliance in particular, and they just aren’t even interested to listen, let alone do anything to change this pathetic, almost dictatorial approach to music online.

Kev

There’s a bad thing being done here to artists - it’s like a kid taking his ball and going home, only that ball really belongs to a lot of other people (artists). Artists have the right to charge what they want… but does anyone believe this position reflects the interests of artists? My hope is that the artist community will really start to rise up and demand proper representation. This is a disaster for them, especially the 99% of musicians who aren’t getting played on the few radios that operate. We’re being inundated with emails from depressed listeners who’ve said that Pandora has re-ignited their passion for music and has driven them to discover lots of new artists and buy their music, and see them play live. I spent 10 years as a working musician - I’m the first one to insist on paying artists - but that needs to be done in a balanced way that allows these new, democratic, inclusive online services to grow. It’s a win-win.

Artists, are you out there?

Thanks for the post, James.

Cheers. Tim (Founder, Pandora)