In the wake of, count ’em, 2 class action law suits filed against Spotify in the past month, Pandora isn’t taking any chances.
The internet radio service acquired the interactive streaming service Rdio this past November. Similar to how Apple acquired Beats which they relaunched and rebranded into Apple Music, Pandora hopes to do the same with Rdio’s technology.
However, if they’ve learned anything from the recent Spotify debacle, Pandora isn’t taking any chances.
Pandora has contracted Music Reports to handle their mechanical licensing. Spotify contracted Harry Fox Agency. Clearly Music Reports is more careful than HFA.
Personally, I own 100% of my US publishing rights. So technically for an interactive streaming service to launch with my compositions they need to send me a Notice of Intent (NOI). 55 of my compositions appear on Spotify, Apple Music, Amazon, Tidal, Deezer and the bunch. Music Reports, to their credit, have sent me tons of NOIs (and penny checks – woohoo!) over the years on behalf of their clients. I have yet to receive a single one from HFA. In addition to Pandora, Music Reports represents clients such as Amazon, Soundcloud, SiriusXM, Verizon, iTunes, HBO and NBC.
HFA (which was purchased by SESAC last year) does the mechanical royalty accounting and reporting for Spotify (and Apple Music), but also represents nearly 50,000 publishing clients (to whom they report). Conflict of interest?
In early December, Music Reports began sending out NOIs and inquiries attempting to track down info on the compositions in Rdio’s catalog for which they had incomplete information.
It seems Pandora is going to first ingest Rdio’s entire catalog into their Music Genome Project (and add all missing songs to Pandora radio) and then phase two will be to roll out Pandora’s interactive streaming service. It’s rumored to launch later this year. Curiously, Pandora has been quite selective about the songs they ingest when they are submitted by individual artists (many get rejected), but are going to ingest Rdio’s entire catalog to comprise Pandora’s “expanded service,” as they call it. Similarly how Spotify, Apple Music and Tidal all have artist radio features within their interactive streaming platform, to merge Pandora and Rdio into one streaming (interactive and non-interactive) platform, Pandora will need to loosen their selection criteria to avoid inconsistencies and holes in functionality (i.e. an artist with an interactive streaming profile could not have a radio station created if they aren’t in Pandora’s Music Genome Project because they were rejected).
Pandora/Music Reports letter sent to publishers last month exclaimed:
“Pandora will not launch expanded service offerings without acquiring the appropriate licenses.”
Even though Rdio may have obtained the necessary mechanical licenses for their catalog, it’s unclear if those licenses will transfer over to Pandora, or if the Pandora will need to directly negotiate new mechanical licenses or issue NOIs to publishers in advance of their interactive streaming service’s launch. One thing is for certain, in the wake of Spotify’s multi-million dollar lawsuits, Pandora is going to be extra careful how they approach this.