Pandora inks deal with world’s largest publisher

Internet radio giant Pandora has inked a landmark deal with the globe’s biggest music publisher Sony/ATV as it readies new product offerings.

The multi-year licensing deal is for the US only, but with Australia and New Zealand the only other territories in which Pandora operates, it’s possible we could see a similar deal announced here.

A Pandora spokesperson told TMN: “Pandora is always open to direct deals and has ongoing discussions with other potential publishing partners in an effort to find more win-win-win agreements.”

Essentially, the deal sees Pandora skip over the compulsory licensing process in the US with collection societies to gain access to Sony/ATV’s roster. The deal means better streaming rates for Sony/ATV rights holders (it now controls 4m song copyrights) as better terms have been negotiated.

Martin Bandier, Sony/ATV Chairman and CEO said in a statement: “We believe that this agreement with Pandora is a major step in the right direction to ensure that our songwriters are fairly compensated for the use of their music on streaming services.

“[…] It is part of our ongoing strategy to ensure that all digital music services recognize the indispensable value that the words and music of a song bring to their businesses,” Bandier added.

Sony/ATVrepresents the copyrights of The Beatles, Kanye West, Bob Dylan, Michael Jackson, Queen, The Rolling Stones and Taylor Swift, among others.

Music Business Worldwide has reported Pandora said the deal will give it ’theability to add new flexibility to the company’s product offering over time’.

A Pandora spokesperson told TMN the deal “is a significant step forward in our long-standing effort to strengthen ties with the music maker community.”

“Pandora is building music’s most powerful marketing engine. And by partnering directly with Sony/ATV, we look forward to connecting an incredibly talented community of songwriters with music’s largest and most passionate audience,” said the spokesperson. “Pandora also benefits from greater rate certainty, locked-in fair economics, and the ability to add new flexibility to the company’s product offering over time.”

In February last year August last year Pandora inked a multi-year licensing deal with Naxos, the world’s leading classical music label. In August 2014 it announced its partnership with independent rights group Merlin – prior to that it was paying statutory licensing rates set by the Copyright Royalty Board. Then in September 2014 Pandora agreed a US licensing deal with BMG to see it deal directly with the publishing catalogue of US performing rights organisations BMI and ASCAP.

Pandora told TMN the BMG deal was not similar to that which it now has with Sony/ATV. “This deal is unprecedented and the details of our agreement are confidential but the economics are an innovative approach to songwriter compensation.”

Pandora has said its deals with the aforementioned won’t be affected by its new deal with Sony/ATV. “The public performance royalties Pandora also pays to rights holders of master recordings are not affected by this agreement,” Pandora said in a statement.

Brian McAndrews, Chief Executive Officer of Pandora said in a statement: “This is a significant milestone in our long-standing effort to strengthen ties with the music maker community.”

A recent report on Pandora’s earnings showed the streaming service is in growth. Despite posting a quarter loss of US$85.9 million last month, its revenue of $311.6 million still marked a 30% year-over-year increase.

Pandora has been drip-feeding new features and offerings this year. In September it announced its Pandora One day-pass subscription and earlier this month it welcomed talk radio into the fold as the exclusive streaming partner for This American Life spin-off podcast Serial. Pandora is also expected to the live music industry after acquiring Ticketmaster-esque website Ticketfly for US$450m in cash and stock.

Late last month Pandora announced it reached a $90 million settlement with music labels – including the three majors Universal, Sony and Warner – over the streaming of pre-1972 audio and songs. Negotiations lasted two weeks. The settlement will see Pandora pay for all the pre-1972 music it played in the last few years. At the end of 2016, it will strike fresh licensing deals with the labels to cover the pre-1972 era.