Tim Westergren Emails Underscore Tension Between Pandora, Artists

In the third quarter of last year, Blake Morgan's songs were played on Pandora some 27,900 times. But the New York-based recording artist and label owner said he made only $1.62 from the popular Internet radio service.

So he found it "disappointingly hypocritical" when he received an email last week from Tim Westergren, the founder of Pandora, that said the company's "goal is to make something ... that can materially impact the ability of artists to make a living."

"The way that this felt was disingenuous and it felt like image repair," Morgan told The Huffington Post. "That's lovely talk, but it doesn't match the walk at all."

Morgan fired an email back to Westergren (read below), telling him that "the idea that Pandora is intimately interested in the success of independent artists rings quite hollow -- especially from a policy standpoint -- when it's put next to the reality of the so-called Internet Radio Fairness Act."

Pandora aggressively supported the proposed Internet Radio Fairness Act, legislation introduced in the last Congress that would reduce the royalties it has to pay to artists and record labels.

The American Society of Composers, Authors and Publishers (ASCAP) and other musician associations joined with conservative organizations like the Taxpayers Protection Alliance and Citizens Against Government Waste to oppose the bill, according to the Los Angeles Times. Many musicians and record labels also opposed the legislation.

"You know when you've done something when music labels and artists are hand in hand agreeing on something," Morgan told HuffPost.

"There are more than 100,000 artists on Pandora, the majority of whom are independent," said Mollie Starr, the company's director of corporate communications. "We have an ongoing dialogue with artists every day -- it is a central part of Pandora's mission and product development."

Read the exchange between Westergren and Morgan below. The final two emails are exclusive to The Huffington Post:

On May 1, 2013, at 1:15 a.m., Tim Westergren wrote:

Dear Blake,

I hope you don't mind this unsolicited email. I realize Ed on our team has already tried reaching out, but I thought I'd give it one last shot.

Hopefully you received the earlier email along with the attached artist deck that gives a preview of the product direction we're considering at Pandora to help working musicians build their audiences.

Over this past month we've had over a 1000 conversations with independent musicians on Pandora. It's been a very productive, and encouraging dialogue. One thing is crystal clear, there are large numbers of musicians who have not been part of the mainstream that have the talent and commitment to break through. And internet radio could be the difference.

We received a ton of feedback on the artist deck, and ideas for the future. We're consolidating all that feedback and will be circulating a summary shortly. The input will most definitely impact the direction of our product development. Our goal is to make something truly useful -- not just interesting or cosmetic. Something that can materially impact the ability of artists to make a living. So stay tuned for that.

The letter of support which we also included in our earlier email has also taken on a life of its own. We're approaching 500 signatures! As we suspected, there is a huge appetite among working musicians to be heard, and to begin participating in shaping the future of the music industry. The response has been so enthusiastic that we have decided to expand the campaign more broadly. If you're curious to learn more, or think you'd like to somehow participate, we'd welcome you. We really think there's an opportunity here to change the course of the industry in a direction that will be far more inclusive and empowering for independent musicians.

We look forward to hearing from you.

Best regards,
Tim

Tim Westergren
Founder, Pandora

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On May 1, 2013, at 8:16 a.m., Blake Morgan of ECR Music Group wrote:

Hi Tim,

I have to be blunt and honest in my reply.

I like Pandora, and have supported it. However, this approach and idea that Pandora is intimately interested in the success of independent artists rings quite hollow –– especially from a policy standpoint –– when it's put next to the reality of the so-called Internet Radio Fairness Act.

I was terribly disappointed to find your company working hand in hand with someone as unscrupulous as the reality-deprived representative Jason Chaffetz (R-Utah) on this bill. This is a congressman who aside from voting against economic stimulus packages and voting NO on banking regulations, also denies evolution (I'm not kidding) and global climate change, while insisting that President Obama is not an American citizen. Certainly not the sharpest –– or most reasonable –– tack in the box.

Representatives [Mel] Watt and [John] Conyers have gone so far as to re-name this bill humorously as the Paycheck Reduction Act.

The AFL-CIO, NAACP, Americans for Tax Reform, the American Conservative Union, SoundExchange, and others all oppose this bill, and the supposition that Pandora should pay less to artists and songwriters in order to accomplish higher profitability.

So again, Tim, I support Pandora and would like to believe that you and your company have artists' best interests at heart. Unfortunately, it's difficult to stomach this supposition based on policy, and reality.

best,
B

Blake Morgan
Founder & CEO

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On May 3, 2013, at 2:20 a.m., Tim Westergren wrote:

hi Blake, -

Thanks for the candid feedback. Always appreciate that.

Unfortunately, there's been a lot of misinformation put out about our intentions. We have no desire to lower royalties dramatically. In fact, we've already expressed a willingness to consider a structure that would have our payments never go down from their existing levels.

We're seeking a balanced structure that allows musicians to generously participate in the business, while also accelerating its growth. Every hour that moves from AM/FM to the web is good news for musicians, as AM/FM pays zero royalties to performers. There's definitely a win-win to be had.

When it comes to the politics of the supporting members in congress, that's not a luxury we have. Congressman Chaffetz has been strong on this issue -- as has Senator [Ron] Wyden, a liberal democrat from Oregon. It's not a partisan issue.

I hope this helps shed some more light on our perspective.

Best regards,
Tim

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On May 6, 2013, at 12:03 p.m., Blake Morgan wrote:

Hi Tim,

I appreciate the dialogue as well, and your desire to try and clarify your intentions.

I hear you when you say you're "seeking a balanced structure that allows musicians to generously participate in the business." But respectfully –– and this is quite important –– musicians are what your business is built on.

Without us, you don't have a business.

The idea of "allowing" us to "participate" in a business that is built solely on distributing and circulating our copyrighted work is like a grocery store saying it has an idea to "allow" the manufacturers of the goods it carries to get paid. The store isn't "allowing" Del Monte to get paid for their cans of green beans, right? Of course not. The grocery store pays for the can of green beans, and then monetizes it themselves for their own fair profit. If the store couldn't pay Del Monte for their goods, Del Monte would pull those goods, and/or maybe the grocery store would close.

So part of the argument Pandora has made in support of the so-called Internet Radio Fairness Act is that internet radio is a burgeoning and fragile medium that is, in fact, in danger of closing. That it's an industry that needs a little boost right now, at its beginning, just to get going –– or it will collapse. Consequently, the Act proposes to reduce musicians' royalties by up to 85% from the tiny amount they're even paid now (although you say that you have "no desire to lower royalties dramatically," it's clearly stated in the bill).

But there's a problem with this argument. I couldn't help notice –– because it's been so widely reported –– that you yourself earned a reported $13.9 million last year from cashing in stock options in your very own company, Pandora. Being wealthy and successful is certainly no crime, but I'm sure you can understand how to the objective and rational observer, it's difficult to see you making a fortune on the one hand, while you and your company are pleading economic and industry hardship on the other.

Lastly and quickly, about Rep. Chaffetz. He is not a random "supporting member" of the bill in Congress. He's the author and sponsor of the bill, which is very different. He's not someone who just joined the cause and you can't be responsible for him –– he's the champion of the cause. And while I may disagree with others such as Senator Wyden on this issue, I can do so respectfully with the understanding that he at least lives in an evidence-based world, unlike Rep. Chaffetz, who thinks humans and dinosaurs co-existed like in The Flintstones.

I support internet radio both as a musician, and as a music company founder. And I truly hope the medium does flourish, in fair and reasonable partnership with the artists who make it possible.

yours in music,
B

Blake Morgan
Founder & CEO

This story has been updated with a comment from Pandora.