The latest step in the music industry’s slow-motion revolution over licensing came on Thursday, when Pandora Media announced that it had struck a direct deal for music rights with BMG, the world’s fourth-largest music publisher.
BMG’s deal with Pandora is for the portions of its catalog that have been represented by Ascap and BMI, the two giant licensing groups that have long handled the performing rights — the royalty payments for whenever music is played on the radio, online or in concert — for millions of songs in the United States.
Even though BMG remains a part of Ascap and BMI, it bypassed them by making the direct deal with Pandora, for what analysts believe is a higher royalty rate than those organizations — which are governed by decades-old federal regulation — are able to obtain on their own. In exchange, the deal gives BMG and its songwriters unspecified “marketing and business benefits,” according to a statement issued Thursday by Pandora.
Read the full story: New York Times