November 6, 2015
Pandora Media and Sony/ATV announced a multiyear licensing deal yesterday that brings the companies together to provide better rates for artists while allowing Pandora to “benefit from greater rate certainty” that could also help “add new flexibility to the company’s product offering over time.” The direct licensing deal arrives as the music industry prepares for potential changes regarding federal regulation of songwriting rights. Sony/ATV is the world’s biggest music publisher with songwriting rights to thousands of artists, including the Beatles and Taylor Swift.
“Songwriters and music publishers have long complained about low payouts from Internet radio and fought fiercely with companies like Pandora for better rates,” reports The New York Times.
A previous Pandora deal gave Sony/ATV rates that were 25 percent higher than rates it received through licensing clearinghouses ASCAP and BMI. The deal bypasses the traditional licensing system through the clearinghouses that offered blanket licenses to radio stations and online streaming services.
“But ASCAP and BMI — supported by many publishers and prominent songwriters — have complained that outdated regulation by the federal government has prevented them from obtaining fair rates from digital outlets like Pandora,” notes NYT.
While the Justice Department has been reviewing the regulatory agreements, major publishers could withdraw their catalogs from ASCAP and BMI if they do not agree with the changes.
Unnamed publishing execs indicate that a number of music publishers have been approached by Pandora regarding licensing offers similar to the Sony/ATV deal.