Love how streaming is bad for artists, now is changed to streaming is bad for new artists. I wonder what next one is...— Daniel Ek (@eldsjal) July 15, 2013NEW YORK ( TheStreet) -- It must have been a relief for Pandora ( P) employees to wake up to Internet radio controversy Monday morning that doesn't directly involve them. ICYMI: As he often does, Glenn Peoples at Billboard does an excellent job reporting producer Nigel Godrich's decision to pull music from Spotify, including Radiohead singer Thom Yorke's 2006 solo album, and the duo's subsequent rants against the prevailing Internet radio royalty model. Godrich and Yorke take what appears to be the righteous route: This isn't about us, it's about those up and coming blokes. The "small labels" and "new artists" who can barely "keep their lights on."
The reason is that new artists get paid f**k all with this model.. It's an equation that just doesn't work— nigel godrich (@nigelgod) July 14, 2013It's stunning just how misguided such imaginative and otherwise intelligent individuals can be. Complaining about the royalties indies (or any other artist for that matter, save the songwriters and composers) receive from Internet radio is akin to the food preparer's union turning down a 25 cents per hour pay raise stemming from increased order traffic via Seamless.com. The compensation structure regarding royalties has always sucked for small labels and their equally-as-small, though usually smaller acts. That's an industry-wide ill guys like Godrich and Yorke have historically bitched about, but never made material moves to rectify. Now, suddenly, as dozens of platforms emerge playing music that has never seen the light of day, they go on the attack, be it against pure players such as Pandora or the on-demand services like Spotify and Rdio. These guys need to focus their energies in directions where they might actually have an impact. They're scapegoating Internet radio for a situation it didn't create and certainly hasn't made worse. In another Tweet, Spotify founder Daniel Ek points out that his company will pay out over $500 million in royalties this year. Like Pandora, it distributes somewhere in the neighborhood of 60 percent of revenue to license content. Do Godrich and Yorke expect companies such as Spotify to act as charitable organizations? Talk about biting the hand that feeds you and leading indie artists on a path to career suicide. If Godrich and Yorke want to take a stand, why don't they do it against Apple ( AAPL), as the company forces an iTunes Radio agreement on indies that effectively takes tons of music for free and marries itself to the outdated model of "physical" sales/downloads? Even more importantly, Apple has little, if any, interest in promoting indie music. That, at least in part, is what platforms such as Spotify were founded on. Pandora absolutely punches in each day with the related missions of music discovery, giving indies airplay and, even more importantly, connecting fans with the artists they already love and recently stumbled upon. As these companies evolve -- and attempt to put what little R&D money they have into innovative products -- they'll be able to do more and more with the data they collect on their user's listening habits and such to help performers maximize their revenue-generating potential beyond the dead-end road of royalties. It's all about data. It makes sense that the music industrial complex doesn't get it, but one would think cats like Godrich and Yorke would not only speak the language of tech, but embrace it to help music realize its massive potential in the digital age. There has never been greater opportunity, which makes it difficult to understand the continued ignorance and attendant resistance. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.