Until now, Pandora bagged bulk licensing rights to multiple music publishers by dealing directly with big wigs such as BMI. However, a new court ruling now allows individual music publishers to directly negotiate deals with Pandora.
Getting bulk licensing deals works out great for Pandora because it allows the company to get access to a huge amount of music in a single fell swoop. For instance, Pandora had been able to get access to the entire BMI music catalog by reaching a deal with BMI directly.
However, starting from January 1st, this is going to change. With the start of the new year, BMI will allow individual publishers to pull out their music from any licensing deal signed by the company. In other words, even if Pandora and BMI continue their licensing agreement, any music publishers which work with BMI will have the option of pulling out of this deal and then negotiating their own deal with Pandora.
This change in the rules of online music streaming are sanctioned by a recent court ruling which says that any individual publishers who want to opt out of mass licensing deals can do so. However, it remains to be seen will the publishers really avail the option because trying to sign a direct deal with Pandora will also incur a lot of new costs for them.
For Pandora, this is certainly not good news because it means the company will have to deal with individual licensing agreements which, in turn, will not only bump up the costs for Pandora but may also trim down the music catalog offered by the online streaming service.
Courtesy: The Verge