Pandora recently made a first-of-its-kind direct licensing deal with indie global rights agency Merlin. This direct licensing deal will result in more than 20,000 labels’ and distributors’ artists getting more pay and play time on the top streaming service. This will also allow Merlin and Pandora to negotiate fees directly, no longer having to paythe rates set by the Copyright Royalty Board (CRB). Merlin CEO Charles Caldas expects to see “royalty payments increase significantly.”
In a similar fashion to some of the interactive features being pursued by Beats Music, Merlin’s artists will also have the opportunity to communicate directly with fans directly through their own channels and will have access to Pandora’s metadata for the first time. This will allow them to make better informed decisions about where to tour, which songs to release, and even concert set lists.
Although the music genome algorithm will still suggest songs, Merlin affiliates’ songs will show up more frequently and sooner in their listeners’ radio station streams. This means that Merlin artists Arcade Fire, Vampire Weekend, and Lenny Kravitz will potentially be able to be included on playlists sooner because of Merlin’s new lobbying influence. This is a groundbreaking deal for such independent artists, who make up about 10% of the overall US digital music market.
Pandora will continue to pay artists through SoundExchange that adheres to the guidelines set forth by the recent Digital Deals Declaration. They will also continue to allow artists to track their Pandora royalty earnings.
It’s speculated that this deal will boost Pandora’s relationship with artists, even after pushing legislation a couple years ago that would have cut the royalties it owed artists. At least that’s what Pandora’s hoping. It certainly seems like it’s a win-win for everyone.