What? John Popper is cool with tiny Pandora payout

Is the online music industry giving songwriters the "Run-Around?"

You might be surprised to know that Blues Traveler lead singer John Popper, who wrote that song, doesn't think so.

Pandora pays songwriters an average of only 8 cents for every 1,000 plays. That works out to 4.3 percent of Pandora-generated revenue going to publishers and songwriters, and half going to record labels and performers, according to The Wall Street Journal.

Pandora and the American Society of Composers, Authors and Publishers are in federal court this week in case involving the future of online music payments.

Internet radio plays aren't a steady income source for musicians but have other, worthwhile benefits, according to Popper.

(Read more: Beats launches streaming music service)

"Throughout history, musicians have never counted on intellectual property really getting them rich," he said on CNBC's "The Kudlow Report." "A very tiny fraction of people make a lot of money with records in the old way."

But what services like Pandora and Spotify lack as serious moneymakers for musicians they make up for in bringing in new fans—and you can't put a price on that, Popper said.

"Eight cents for every 1,000 plays sounds really cheap, but you have to consider that [these] fans would have never listened to you in the first place … and it's a way to promote yourself," he said.

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