Alternative rock band Cracker released the song "Teen Angst" as a successful single in 1992, with the track charting at No. 1 on the U.S. Modern Rock Tracks. Twenty years later, frontman David Lowery still has a lot of angst, only now he says it stems from Internet radio provider Pandora Media.
Lowery complains that the songwriter royalties paid by Pandora are way too low, which is ironic because "Low" is another popular single released Cracker in 1993.
Puns aside, Lowery told CNBC's "Street Signs" that one of his songs would have to be played a million times on Pandora for him to earn just $16.29 as a songwriter. In other words, he said, he receives roughly $0.00001456 in royalties per song played on Pandora.
Pandora has challenged his position, telling technology news site Venture Beat, "Mr. Lowery's calculations grossly understate Pandora's payments to songwriters. In truth, Pandora paid many times more in songwriter royalties to play the song referenced in his article."
The dispute might have to do with how radio royalties work.
If a song is played on FM radio, the songwriter—not the performer or label—receives a royalty. Pandora, however, pays a royalty to the songwriter, performer and the label. In fact, 50 percent of its revenues go to royalties, while rival SiriusXM designates just 10 percent of its revenues to royalties.
But Lowery insisted the royalties Pandora pays songwriters is still way too low.
"This is where the music business starts—you start with songs," said Lowery, who is also a member of alt-rock band Camper Van Beethoven.
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