Pandora Inks Deals With Sony Music, UMG, Indies for U.S. Music Subscription Service

Todd Spangler

Pandora, gearing up to launch a new on-demand music subscription service, announced licensing agreements with Sony Music Entertainment, Universal Music Group, Merlin Network, the Orchard and 30-plus indie labels and distributors.

The agreements — which cover only the United States — will let Pandora “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 said.

Warner Music Group, one of the three biggest music companies, was absent from Pandora’s announcement. Pandora previously signed ASCAP, BMI and more than 2,700 publishers to license their full catalogs for use on the company’s upcoming products. With the deals set, Pandora plans to launch a paid music-streaming service to more directly compete with Apple Music, Spotify and Google Play Music.

The company’s existing $5 monthly subscription tier, Pandora One, strips out ads from personalized radio-like streams but doesn’t let users play songs on demand. A new subscription service, which Pandora expects to launch before the end of 2016, would include that feature. Pandora did not announce pricing for the forthcoming service.

Regarding the licensing pacts, Pandora founder and CEO Tim Westergren said they represented “a truly collaborative attempt to find a solution that would support artists while profitably growing our respective businesses. And that is exactly what we achieved.”

“This partnership should be a very encouraging sign for the entire industry,” said Sony Music chief Doug Morris. “Pandora is a company founded and run by a musician. We are naturally aligned and look forward to growing the music business together and collaborating to support our artists in the digital era.”

UMG chairman and CEO Sir Lucian Grainge said the Pandora agreement represented 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 has more than 78 million monthly users and they listen to 24 hours per month on average to its ad-supported and subscription offerings.

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