Pandora Media Inc. rose as much as 15 percent after a top US official said rate-setting judges could consider the Internet radio company’s agreement with small music labels.
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In this rate proceeding, the CRB will determine the rates and terms for webcasting under a statutory license for a term of January 1, 2016 to December 31, 2020. Through Friday, the shares were up 10 per cent this year. Merlin is an worldwide rights group that represents over 20,000 independent music labels and distributors. Clearly the judges thought the Merlin agreement, which has rates (11.9c-13c per 100 ad-supported spins) below the current rate, was an important consideration, but there are other submitted benchmarks that are higher, and some lower (iHeartRadio at 5c per 100 spins). However, SoundExchange, a non-profit organization that collects royalties and provides it to artists was not in favor of setting the Merlin deal as a benchmark.
Dave Grimaldi, director of public affairs for Pandora.
“We look forward to the certainty that December’s decision will bring, and are prepared to thrive in a number of potential outcomes”.
Pallante’s opinion reduces the chances that Pandora would suffer a “devastating loss”, Matthew Schettenhelm, a Bloomberg Intelligence analyst, said in a note.
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Most analysts observe that Pallante’s opinion is a significant catalyst for Pandora.
