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"Pandora is a Religion Not a Music Service."


Bob Lefsetz is the author of "The Lefsetz Letter." It's a free online blog/newsletter that at one time Lefsetz would charge subscribers $100 per year to read. He's been publishing for over 25 years now and is one of the most widely read writers in the music business. His website doesn't include any advertising which, as the site states, allows him to speak the truth about the music business, downloading, copy protection, pricing and music. After reading Pandora founder Tim Westergren's latest blog, he opened his latest piece with, "He's at it again."

Westergren, in his blog, detailed how much money his company was sending to artists, which included tens of thousands of dollars to obscure bands to millions of dollars to popular artists. It was a new angle for Westergren who is hoping to convince Congress to set lower rates for what Pandora and other Internet radio companies pay to play music. And, he said to artists, they should embrace his model. Lefsetz isn't buying Westergren's approach and followed up with a blog of his own. Here's what he had to say.

"Tim Westergren is not running a music service, but a religion. He expects his flock to follow him blindly, leaving their minds behind, all with the goal of lining his pockets. He owns stock worth double digit millions, yet he's complaining the company's getting screwed. Who does this resonate with? Certainly not artists or listeners.

And now in this latest blog post he raves about how much obscure artists are making on his service so he can rationalize paying them less. Huh?

What he's saying is if you let me pay less, the sphere will grow and you'll make tons more money! Never mind that this is anathema to Pandora's shareholders. You can only listen to one radio station at one time, whether terrestrial, satellite or Internet, people only have so many hours in a day, where are all these listening hours gonna come from? It's kind of like the Internet. If I'm surfing all night, I can't watch television. Hell, I oftentimes can't even listen to music! Market share is everything, and Tim Westergren seems to be saying here that he's willing to give up some of his. This is like Lucian Grainge giving away Parlophone if the European Commission would just approve the EMI merger... How duplicitous can you get?

If it's all about money, why doesn't Pandora add some commercials. That's what their main competitor, terrestrial radio does, you've got to pay the
bills somehow, there's no free lunch. Just ask Facebook, we give up our data for that service.

As for Sirius XM, I love this e-mail I received: "So, Tim Westergren doesn't own the pipeline, doesn't have to design and manufacture hardware (much less convince auto manufacturers to install it) and doesn't pay for upkeep on a network of satellites? Cry me a river." Tim's got a fraction of the costs of his competition, but he wants the same deal. A level playing field? Tim wants full-blown TILT!

This is why the music industry hates technologists. Self-satisfied pricks like Tim Westergren who believe they're entitled to make a huge profit off the hard work of others, in this case the copyrighted material known as music. And he rationalizes it by saying it's good for the public. Isn't that like saying free food is good for the public? And free cable TV? But who's gonna pay to grow staples and lay the pipe?

Why are all these techies so delusional?
Yes, the music industry has been too slow to license.
Yes, it tends to extract its pound of flesh.

But your way into copyright holders' hearts is by proving you're going to make them more money. And that's not what Tim Westergren is doing here, he's just lobbying on behalf of his shareholders.

The road to the economic future of the music business is riddled with potholes and conundrums. But in order to succeed in delivering a better model, we must work together, all sides must be included, creators, distributors, exhibitors and the public. The industry lost credibility and revenue by refusing to put the public in its equation. Now Tim Westergren wants to push the creators down to help him, not even the public. This is not a solution, this is heresy!

Subscribe to The Lefsetz Letter HERE
You can e-mail Bob directly HERE
Follow on Twitter @Lefsetz

(10/11/2012 2:48:21 PM)
Bob, I appreciate that you are calling the sham a sham. Us "terrestrial losers" still dominate listening-over 93% of the total Radio listening each week. Why, because it is free and easy. If you do not like the song, the commentary, or the ad, you click to a different station.

Advertisers want engagement with their local audience. You cannot create that connection with a digital jukebox.

Terrestrial Radio has seen many of these shiny new toys, with the accompanying predictions of its demise.

- Jeff Gonsales
(10/11/2012 1:19:24 PM)
My experience with Pandora is that it stops periodically requiring the listener to verify they're still listening. Saves them wasted pay out expense and validates listeners' level of engagement.
Same thing with modern cable or satellite set top boxes. They detect whether the TV they're attached to is on or not. Again to verify viewership data being collected.

A definite step up in audience measurement accuracy compared to over the air monitoring via people meters.

- JS
(10/11/2012 1:02:05 PM)
You keep running from the truth. Other technologies are making you obsolete. Bob Struble scammed all of you with HD Radio. Suckers! Struble will get his IPO and leave your airwaves in shambles! LOL!

- Terrestrial losers!
(10/11/2012 12:51:08 PM)
Chuck, I just started up Pandora's Classic Rock station... WOW look how deep they go. Check out the first 7 songs. I guess they got the "Play the Hits" memo too...

CCR - Up Around the Bend
Boston - More than a Feeling
Eagles - Take it Easy
Tom Petty - Free Fallin'
Animals - House of the Rising Sun
David Bowie - Modern Love
CCR - Proud Mary

They even repeated an artist within the first 7 songs! Yes, Pandora is so deep and original.

- Eric Holmes
(10/11/2012 11:54:58 AM)
One of the dumbest columns I've seen yet. Terrestrial radio is so predictable playing the same crap over and over. At least with Sirius/XM and Pandora I can hear deep cuts or new artists... AND am likely to buy new music... which means artists/musicians make money.

- Chuck

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