Pandora signed its very first direct deal with independent music labels via a partnership with global rights agency Merlin. The contract marks a new age for the popular online streaming service, after years of squabble between artists (and their labels) and Pandora. Merlin represents over 20,000 independent labels from 39 different countries, and specializes in the global independent music sector. Pandora will help Merlin’s musicians by matching them to the right listeners using its recommendation engine and giving artists data on listening patterns. It will also implement customized channels for artists to communicate directly with fans.
So far Pandora’s contract with Merlin foreshadows 3 main capabilities.
1. It will help out Merlin’s labels by supplying them data from Pandora’s Music Genome Project to identify tracks worthy of additional exposure, and targeting the right listeners
2. Merlin’s labels and artists will be able to access metadata and insights, “harnessing Pandora’s 75+ million monthly active users, 6 billion stations” and “40 billion pieces of listener ‘thumb’ feedback.” By supplying this data, Pandora will help labels and musicians make decisions on tour locations, concert set lists, targeting, or choosing a touring partner.
3. Pandora will offer “customized communication channels” for artists to engage directly with fans.
Tim Westergren, Pandora’s founder, bumped the partnership with Merlin, saying “Independent music has always held a special place at Pandora. These are hardworking artists – many of whom have never received promotion or airtime on terrestrial radio – and their music deserves to be heard.” It’s a new era for Pandora, which has had its fair share of artist disputes in the past. Just two years ago, the top 125 artists blasted the company for trying to “gut” artist payouts. Even more recently, Pink Floyd accused Pandora of pure trickery for attempting to cut royalties. The timing of this partnership couldn’t be better. Many investors had sinking expectations about Pandora’s potential for growth, and the deal is sure to boost both PR and share prices for the streaming company. The goodwill from a partnership with a global agency like Merlin could positively affect Pandora’s ability to enter markets overseas in the future. Though the Merlin deal only applies to Pandora’s US business, Pandora now has opportunities for international expansion. As Joan E. Solesman from CNET points out: “The question is whether – and if so, when – Pandora will step across the threshold.”