US-centric internet radio service Pandora is getting one step closer to launching a subscription streaming service by securing direct licensing agreements for sound recordings with indie labels' licensing agency Merlin Network, two major companies - Sony Music and Universal Music Group - alongside digital aggregator The Orchard and over 30 other independent labels and distributors. The only key repertoire missing is that of Warner Music Group.
The agreements follow recent deals with US performance rights societies ASCAP and BMI and with more than 2,700 publishers. For the moment these agreements are solely for the USA but it is anticipated that they will soon be extended globally, allowing Pandora to deliver a truly global service. At the moment, Pandora offers a series of non-interactive audio channels to its 76 million users , only three million of which are paid subscribers.
In a statement, Pandora said that with these agreements are "paving the way for Pandora to bring new products to market that enable enhanced subscription services, fuel new advertising opportunities and deliver unprecedented flexibility and ease of use to listeners."
The company added that it "will soon deliver the world’s most personal and complete music experience, while opening up the full power of the platform to connect artists with their fans at scale and leverage the promotional offerings of Pandora’s Artist Marketing Platform."
Pandora Tim Westergren is expected to provide more details on the new "experience" during a call with analysts today. In a statement, Westergren praised the collaborative spirit that presided to the negotiations. “This was a truly collaborative attempt to find a solution that would support artists while profitably growing our respective businesses,” said Westergren. “And that is exactly what we achieved. 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.”
For Charles Caldas, CEO of Merlin Network, said the deal will bring "additional revenue opportunities ... for our members." He added, "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.”
“This partnership should be a very encouraging sign for the entire industry. Pandora is a company founded and run by a musician," said Doug Morris, CEO of Sony Music. "We are naturally aligned and look forward to growing the music business together and collaborating to support our artists in the digital era.”
Lucian Grainge, Chairman and CEO of Universal Music Group, added: “We are pleased to work with Pandora to enable compelling new products and services for one of the largest music streaming audiences in the world. 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.”