Pandora Surprise: New York Post Headline Writers Are Hacks

NEW YORK (TheStreet) -- As has become custom, when sensational and imprecise Pandora (P) news breaks, I often jump in with clarity.

But first, let's get something straight right off the bat.

Just as good television and radio stations do everything possible to keep you tuned in through commercial breaks, we want you to click on our articles. As such, we write snappy headlines. While many other organizations use "headline writers," TheStreet, by and large, leaves article titles up to the author. After all, we know what best represents the content we, as individuals, write.

Call it "click bait" all you want; I call it smart. Do readers expect us to write headlines that would discourage them from clicking on an article? Not any more than they would expect CNBC's Carl Quintanilla to say, You know what, dear viewer, turn off the TV because we gots unadulterated boredom after these commercials.

That said -- and, yes, I fall short from time to time -- I hold myself to a standard: The content that follows the click must deliver -- as in flow from -- the headline. The content needs to satisfy the reader's quest for information and/or stimulation. You might not always agree with what you read, but you weren't mislead.

Unfortunately, not everybody abides by this guiding principle. Again, nobody's perfect -- we all mess up occasionally -- but if you were to cobble a list of the worst offenders, News Corp's ( NWSA) New York Post belongs at the top.

Here's the headline it used this morning on an "EXCLUSIVE" Pandora story:

Then, in the story, Claire Atkinson buries what absolutely should have been part of the lead, focusing on "financial trouble" and broad-stroke mentions of an "increase in Pandora royalties" in association with her report that music publisher Sony/ATV negotiated a 25% increase in fees it collects from Pandora to play, among other selections, Michael Jackson songs. She provides some, though very little meaningful context at the very end of the story.

That's a problem.

If you only read the headline -- as so many people do -- you walk away thinking, here we go again, Pandora's royalties keep going up. That's a general perception that, while not necessarily false, paints a not-exactly-accurate picture.

Here's the deal: As Atkinson vaguely explains in her final few paragraphs, Pandora pays 93% of its content acquisition costs to SoundExchange on a per-track basis as per the 2009 Webcaster Settlement ( See my explanation of compulsory versus direct licensing for some color). This is the chunk of money the labels and Internet radio are fighting over in Congress right now.

Composition royalties/music publishing rights make up roughly 4% of Pandora's content acquisition expenses; this money goes to music publishers such as Sony/ATV.

So, the devil is in the details, buried by the New York Post. Using simple numbers -- if Atkinson's story is legit, that 4% portion of the pie will see the 25% increase, not the 93%, which is fixed through 2015.

As I write, P is down more than 2%. The damage was worse in the pre-market and at the open. Why? All because of a headline.

Shocking, but this is all too strangely similar to what went down in another Rupert Murdoch-owned publication, The Wall Street Journal, earlier in the week regarding "weak demand" for Apple's ( AAPL) iPhone 5.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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