BREAKING: Indie Artist Wants Pandora to Act Like a Charity

NEW YORK ( TheStreet) -- I have tried to engage indie artist Blake Morgan. Pandora's ( P) co-founder and Chief Strategy Officer Tim Westergren has done the same. I can only assume others have as well.

In my case -- and, from what I understand, in Westergren's case -- these overtures receive no response from Morgan. That's not much of a surprise. Morgan must know deep down that he floats a flawed argument. However, he was at it again over the weekend on NPR's "Weekend Edition."

Morgan discusses the royalty situation minus any necessary context and nuance, which strikes me kinda funny. He's a singer/songwriter; the really good ones tend to look past talking points, war cries and window dressing.

Additionally, between the NPR piece and a Bloomberg Radio interview he did a few weeks back, Morgan speaks from both sides of his mouth.

In one breath, he says he doesn't want more money from Pandora. He just opposes the company's desire to cut artists pay ( Alert: That's a talking point with no context). In the next, he moans about Tim Westergren cashing in a million dollars' worth of stock each month. Morgan can't seem to reconcile Westergren's riches with his $15 quarterly cut of the royalties Pandora pays out for the airplay his songs receive on the Internet radio service.

It's almost as if Morgan wants Pandora -- a publicly-traded technology company with the stated and genuine mission of redefining radio and partnering with musicians -- to apply for non-profit status. He wants them to operate as a 501(c)(3), not a business. Truth be told, Westergren would much rather run Pandora like a social enterprise, but there's some crap that needs to get sorted out first.

Morgan refuses to engage his critics. That's because he realizes his argument doesn't hold up. So here and now, I offer Blake the opportunity to sit down with me and/or Westergren. Let's do it at a SXSW panel or something. Name the time and place and I will be there. While I can't speak for Westergren, I reckon he would show up as well.

We provide different perspectives on a set of issues Morgan absolutely needs to take another look at.

First and foremost, why in the hell does Blake Morgan have royalties on his radar in the first place? I'll never for the life of me understand this. The music industrial complex uses guys like Morgan, whipping them into a frenzy to generate passionate support for something wholly immaterial to most singers and songwriters.

Morgan -- and people like him -- have never, do not and will never make a meaningful amount of money from royalties of any type. That is, unless they transcend categories musically/professionally or give up guitars and songbooks for a record executive's corner office. It's not Pandora's fault, the entire system sucks.

If Pandora offered Morgan 100 times what he ends up getting from them, his take would still be insignificant. Morgan barks up the wrong tree. If it weren't for Pandora and Internet radio services like it, his music would never see the light of day. And, trust me, he's not getting rich -- or even getting by -- on what he makes via Apple ( AAPL) iTunes sales. Terrestrial radio sure as hell isn't spinning Morgan on a regular basis, if at all, so why should its Internet operations pay less than Pandora in publishing royalties?

Blake, stop biting the hand -- let's not say "feeds" -- that gives you a fighting chance! Seek out partners, not charitable contributions to your starving artists' fund.

Second, the entire music industry -- from the fat cats to the Morgans of the world -- must realize something now and adapt accordingly, right away. The legendary Jimmy Iovine knows the deal. The power lies in harnessing data and partnerships.

Artists, now more than ever, need to treat their enterprises like the businesses they are. Interestingly, non-profits represent another area slow to realize this. There's a massive movement that encourages non-profits to run their operations more like traditional businesses. It takes a serious attitudinal shift for many executive directors and such to get their heads around the concept.

Blake Morgan should spend less time squabbling over $15 and more time finding ways to connect with fans, promote himself more effectively and put together tours and other avenues of revenue generation. If he was willing to sit down with a guy like Tim Westergren, he might begin to understand what this process can look like.

Third, I don't see the relevance in Morgan's I make $5 a month from Pandora and that snake Tim Westergren makes a million a month. Dig these numbers:
  • On Feb. 14, 2013, Amazon.com (AMZN) CEO Jeff Bezos sold 193,115 shares of his company's stock, taking in gross proceeds of $51,550,000.
  • On Nov. 28 and 29, 2012, Bezos sold 395,051 shares (per day), collecting $98,762,750 and $98,702,502, respectively.

Of course, I cherry-pick Bezos, one of tech's top earnings through stock compensation, because he represents one extreme. An extreme at the high end. Westergren actually comes in, relatively speaking, on the low end. Amazon is a gazillion times bigger than Pandora. The difference between the money each founder regularly cashes in -- it's commensurate.

The amount means nothing -- this is how tech companies pay their employees. It has nothing to do with anything else. Nor should it.

But again, the talking points of Pandora wants artists to take a pay cut and Look at how much money Tim Westergren makes sound great. Yet that's all they are. Shallow and superficial talking points.

Pandora (and others) wants to shore up a broken system. There's no rhyme or reason to what it pays relative to other types of services -- online and off -- that use music in much the same way. Blow up this chaotic system that only works for a select few and break it down to two simple prongs -- a stream of royalty revenue for the folks who perform a song and a stream for the writers/composers.

Blake Morgan still won't make much, in royalties, from a system that gets sorted up and ends up as fair as can be. That's why he needs to put down his sword, let the royalty thing fix itself (once the parties involved stop acting like idiots) and focus on how to make himself successful in conjunction with the people and companies actually interested in helping him get there.

-- 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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