Blog Coverage Pandora Hits the Right Note with Direct Licensing Agreements with Stalwarts of the Music Business

LONDON, UK / ACCESSWIRE / September 14, 2016 / Active Wall St. blog coverage looks at the headline from Pandora Media, Inc. (NYSE: P) as the company announced on September 13, 2016, that it has entered into a momentous direct licensing agreements, for recorded music content, with stalwarts of the music business such as Merlin Network, Sony Music, and Universal Music Group. The direct licensing also extends to over 30 other independent labels and distributors including The Orchard. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The Ramifications

These agreements will have a deep impact on the music industry. It creates a winning formula for everyone benefitting financially – from artist to labels. Pandora Media through its subscription services gets the opportunity to introduce new products which will in turn attract more subscribers which in turn will pull advertisers. The current direct licencing agreements are for US only; however Pandora Media has plans to extend these globally as it aims to become a global music service provider.

The newly signed music companies join ASCAP, BMI and more than 2,700 publishers who had recently partnered with Pandora Media. In December 2015, Pandora Media had signed two separate multi-year licensing agreements with ASCAP and BMI, the world’s leading Performance Rights Organizations (PROs) for their combined catalogues of more than 20 million musical works. These agreements would benefit the songwriters, composers, and publishers, and improve streaming payments.

Experts in the Music industry speculate that Warner Music Group is also close to striking a deal with Pandora Media; however this is being hampered due to disagreements over revenue sharing.

Comments from the collaborating companies

Tim Westergren, founder and CEO of Pandora Media said:

“This was a truly collaborative attempt to find a solution that would support artists while profitably growing our respective businesses. Working together, we can reshape the digital music market and grow a great business that provides tremendous value to the music industry for decades to come.”

Charles Caldas, CEO of Merlin Network said of the agreements:

“Independent music has always been at the heart of Pandora’s experience, and we are confident that Pandora’s users will appreciate and enjoy the music from Merlin’s market-leading member labels and artists as a vital element of the newly enhanced experience.”

Doug Morris, CEO of Sony Music had this to say of the agreements:

“We are naturally aligned and look forward to growing the music business together and collaborating to support our artists in the digital era.”

Sir Lucian Grainge, Chairman and CEO of Universal Music Group said on his part:

“Working collaboratively, we have created a thoughtful partnership that enables innovation and has the potential to delight music fans and benefit the entire music ecosystem of recording artists, songwriters, labels and publishers.”

Pandora’s game plan

The timing of the agreement coincides with Pandora Media’s plan to launch a subscription-base streaming service. Pandora Media is known for its US focused internet radio service and its proprietary The Music Genome Project® wherein a team of musicologist have sorted a huge database of over a million tracks. This allows Pandora to offer highly customised stations based on constant listener feedback and inputs based either on artist, song or genre. Pandora Media also plans to scale up the platform for various artists to showcase their talent, connect with fans and also make money through Pandora Media’s Artist Marketing Platform (AMP).

It is rumoured that Pandora Media’s subscriptions will be different than the $5 subscription that it currently offers with various levels of on-demand services. The exact launch date of this service has not been disclosed. Currently, Pandora Media has 78 million users who access its ad-supported and subscription services any time of day and night. Of these less than 5% of its subscribers are paid users. However, the current licensing agreement is sure to change this scenario. This will bring competition directly to Spotify, Apple Music, and Google Play Music.

Stock Performance

At the closing bell, on Tuesday, September 13, 2016, Pandora Media’s stock declined 1.33%, ending the trading session at $14.10. A total volume of 7.5 million shares were traded at the end of the day, which was higher than the 3-month average volume of 6.24 million shares. In the last one month and previous three months, shares of the company have advanced 6.82% and 27.37%, respectively. Moreover, the stock gained 5.15% since the start of the year.

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