Who’s to blame for starving musicians – Pandora or the middlemen?

Streaming services like Pandora(s p) and Spotify are mighty unpopular in the music world these days. In recent months, famous acts like Pink Floyd and Radiohead have publicly branded them as cheapskates that won’t give musicians a fair cut of their revenue.
Now, another part of the music industry is under fire. This week, songwriter Aimee Mann filed a lawsuit against MediaNet, a groups that acts as a broker and distributor for millions of songs.
In her complaint, the “Voices Carry” singer accuses MediaNet of failing to pass on a fair share of revenue when it licensed her songs, and of continuing to license the songs even after an agreement between Mann and MediaNet expired. According to Mann, the company failed to provide accounting statements and stopped paying royalties altogether after 2005 — except for a token $20 payment in 2013, which the singer rejected.
MediaNet, which was created by big music industry players and then sold to private equity, did not provide comment to the Hollywood Reporter, which first reported the story.
Update: Here’s the response from Frank Johnson, CEO of MediaNet:
“This claim on behalf of Aimee Mann is without merit.  MediaNet has had a license for her music since December 2003. We have been paying royalties regularly to her agents on her behalf.  MediaNet is a supporter of artist rights and copyright and has been since we launched in 2001. We expect this matter will be resolved.”
If the allegations are true, they will provide more ammunition to critics who say the sale of streaming rights — MediaNet’s speciality — is a raw deal for musicians. But in the bigger picture, the MediaNet affair looks like part of a long and unfortunate history of middlemen in the music industry who have exploited, or outright robbed, the musicians they’re supposed to represent.
This type of scandal is hardly confined to the US. In recent years, royalty collections societies have bilked musicians in Belgium, Brazil, Spain, France and elsewhere.
These scandals show how musicians’ financial woes arise not just from low streaming royalties, but from the complicated way in which music money is collected and distributed — there are numerous copyright collection levels, and each one involves transaction costs and the potential for abuse.
What this means is that, going forward, musicians can’t simply rail that streaming services should pay higher fees. They must also explain how to create a more rational system of payments to ensure they receive those higher fees in the first place. (This is the case even if, as one astute musician points out, Pandora and Spotify “aren’t record companies– they don’t make records, or anything else; apparently not even income. They exist to attract speculative capital.”)
(Image by  Ysbrand Cosijn via Shutterstock)