MBW has obtained an email sent by Sony/ATV chief Martin Bandier to songwriters yesterday, outlining key elements of the major publisher’s new deal with Pandora.
Pandora announced on Friday that it had struck a direct deal for Sony/ATV for its digital rights in the US.
The DSP appeared to pledge to pay the rights-holder a higher royalty rate than that currently distributed to US rights groups ASCAP and BMI – which receieve around 4% of Pandora’s annual revenues between them.
Although not the first time Sony/ATV has agreed a direct rate with Pandora, the timing of the new deal is particularly significant, with the US Department Of Justice mulling whether publishers should be permitted to withdraw their digital rights from ASCAP and BMI in the future – a decision which will ultimately be granted (or otherwise) by the two PROs’ rate courts.
Sony/ATV has not completely withdrawn its digital rights from ASCAP and BMI. Instead it has simply negotiated its own rate – as Bandier points out, payments with still be administered by the rights groups.
Elsewhere in his letter, which you can read in full below, Bandier explicitly tells writers they can expect a “significant increase in [Pandora] royalties” after the Pandora deal kicks in on January 1.
He also appears to dismiss worries over Sony/ATV receiving ‘black box’ income through advance cheques, claiming that songwriters will receive “100% of all benefits” from the agreement, and that PROs will still pay out songwriter money.
Dear Songwriter,
Many of you may have read about our recent deal with Pandora and I wanted to write to you personally and explain what it will mean to you.
As I’ve previously described
I am happy to report as a result of our ongoing efforts Pandora reached out to us over the last several months and we have now entered into a deal, effective January 1st, which will result in a significant increase in the royalties that you will receive.
Although I am not in a position to publicly go into the specifics of the deal, rest assured that you will receive 100% of its benefits. You will also receive your songwriter royalties relating to Pandora directly from the PROs and to be clear, none of those amounts will be used to recoup any advances that you may have received.
Further, I should point out this is a direct deal between Sony/ATV and Pandora whereby we have only licensed the fractional share of the songs in our catalog that we control. In other words, we did not grant Pandora a 100% license. That is consistent with our past practice and what we believe has been the long-standing practice in our industry.
We are very excited about this deal and believe what we have achieved is a major step in the right direction to ensure you are fairly compensated for the use of your music on streaming services. At the same time our efforts to reform the current antiquated performance licensi
If you have any questions or would like to discuss this deal please feel free to reach out to me.
Regards,
Martin Bandier
Chairman & CEO
Sony/ATV Music PublishingMusic Business Worldwide
