What music will live on the new services?
Pandora will continue to curate the ad-supported and PandoraPlus music services and as a result has no obligation to include tracks content partners deliver in the curated playlists or on any playlist featured on the On-Demand Service.
Pandora reserves the right to reject spoken word, non-music audio, tribute and karaoke artists from the premium subscription service as well as music that does not fit Pandora’s reasonable editorial policies and practices.
Pandora also reserves the right to reject music from an artist that does not have a published profile on services such as Rovi’s All Music Guide, Next Big Sound, Gracenote or last.fm.
You may have seen in the press this week that Pandora has unveiled its premium streaming tier, Pandora Premium, set to launch in early 2017.
We have negotiated a direct license with Pandora for this all-you-can-eat tier, and all 5050 Music Group distributed content will be live once the service launches next year.
Please see below for a few highlights around the deal and reach out to your label manager with any further questions.
Pandora has been live in the U.S. for years. How was Pandora licensed previously?
Prior to Pandora striking direct deals with content partners such as 5050 Music Group, Pandora obtained compulsory licenses via SoundExchange’s collective licensing system.
These licenses did not include direct negotiation w/ rights holders and only extended to non-interactive music services.
The licenses had strict guidelines & restrictions around the functionality of the service.
What prompted Pandora to strike direct licenses?
In order for Pandora to broaden the functionality of their services and add a premium subscription service, the company needed to strike direct licenses with content partners such as 5050 Music Group.
It is only these direct license partners that can participate in Pandora’s new revenue streams and therefore, 5050 Music Group’ labels who previously opted out of our Pandora delivery service will now be opted in to access the new services.
What are the new Pandora services?
5050 Music Group’ direct license with Pandora includes an updated ad-supported radio service, mid-tier subscription service, now called PandoraPlus, and a full on-demand subscription service (TBD launch).
Ad-supported radio listeners now have more control over their advertising and listening experience with the ability to skip up to 6 additional songs in a one-hour period and replay up to 6 additional songs in a 24 hour period by watching a video ad.
Priced at $4.99/month, Pandora Plus includes unlimited skips, up to 5 replays of tracks in a user’s listening history and a maximum of 10 playlists that update frequently and can be listened to offline.
Is there any reason a label should not opt-in to the Pandora deal?
· No, labels who do not opt-in to Pandora’s new services via a direct license partner are leaving money on the table by not participating in the three music services.
· Labels who do not opt in to the Pandora direct license can still be programmed into playlists by Pandora and royalties will still flow through SoundExchange. We highly advise against this strategy.
· Pandora’s focus is to provide the best user experience possible which includes curating playlists with direct license tracks that offer additional functionality. Based on the information we currently have, abels who do not opt into the Pandora direct license with 5050 Music Group run a greater risk of not being programmed in playlists.
How will labels & artists royalties be distributed?
Royalties from tracks played on Pandora's music services will be distributed via two methods. Artist and label payment for tracks played on Pandora's ad-supported service will be split in two with the artist portion being paid to Sound Exchange and the label portion being paid to 5050 Music Group.
Artist and label payment for tracks played on Pandora Plus and Pandora's upcoming on-demand service will be paid as one to 5050 Music Group. Payment and reporting from 5050 Music Group to labels will be distributed in our normal monthly cycle.