Comically low compared to what? Sure, compared to a CD sale they are low, but the royalties on a CD sale cover all future listens, by all future owners of that disc. Royalties on radio playback pay for one listen by tens of thousands of people. Royalties from a stream pay for one listen by one person, of course they are low.
Exactly. If I'm not mistaken sometimes terrestrial radio stations are PAID by the labels to promote certain shitty pop songs. Why do you think they play the same ones every hour?
Here's another thing I don't get thought. I listen to albums every day on Spotify. I also bought a few on iTunes. How much of that $9.99 does the artist get for my unlimited usage?
Pandora didn't advertise the product. They delivered the product. The product is the MUSIC YOU ARE LISTENING TO. The experience of listening to music. If you don't understand that, you shouldn't even participate in the conversation.
Or you could say that playing one song is an advertisement for the album or for the artist. There are many artists I wouldn't have otherwise known about if it wasn't for pandora.
"If you don't understand that, you shouldn't even participate in the conversation."
This is childish. "If I can't conceive of any other perspective, then you shouldn't open your mouth!!!!"
Seriously, you can SAY a Honda Fit is an advertisement for Honda cars in general. But the car is still the product. Only with music. With no other product than music, do people in our culture so consistently rationalize getting one thing for free as exposure or advertising for some hypothetical other revenue stream that will one day happen down the line.
That's not an analogous situation. When you buy a Honda Fit, you selected it specifically at the dealership (down to choosing the color and possibly extra add-ons like GPS, smart-key, etc), agreed on a sum of money to exchange and then took ownership of it and drove it home. When you listen to a song on Pandora, it's likely that you've never heard of that song (or even the artist) before. Combine this with the feature that lets you purchase the song (or album it came from), and it's not a far stretch to view of plays on Pandora as advertisement to the benefit of the artists.
A better analogy would be that a test drive is an advertisement.
If I can get a "test drive" of the music whenever I want, all the time, then yes, I'd be less likely to buy it. And so there's likely a crossover point where too "smart" streaming systems will cut into revenue. You see fear of that in e.g. last.fm's restrictions on number of skips per hour for the web player.
But it is pretty clear that a lot of peoples music buying habits involve first getting to know an artist or a specific song via exposure to it. All the music I buy comes as a result of that.
There are many things people might generalize about the brand from having experience with one instance of that brand. By driving a bmw, for example, you might get to experience the luxury offered by bmw-built cars.
You can keep asserting what you like, but I don't think what I just said is unreasonable at all.
If Pandora's streams 'are the product' then why does Pandora have a 'Buy' button? It's not a tip jar: Pandora doesn't let you listen to a particular song on demand, or offline.
Not only is your analogy flawed for the good reasons described, but you also don't understand Pandora.
If you stay on a single station very long, you will hear it repeat. Their catalog simply isn't that large. I can name the THREE whole Calvin Harris songs I've heard in ALL of my EDM artist playlists on Pandora.
On the other hand, I've bought a ton of albums from new artists on Amazon that I'd found through those stations.
Of course, now Spotify is just superior in basically every way and I'll happily pay for it (Or Google Music, still debating)