Pandora, Merlin deal could serve as template for royalty rates


Pandora, Merlin deal could serve as template for royalty rates

olegganko /

Online music streamer Pandora’s agreement with independent musicians' association Merlin Networks can serve as a valid template for the standard royalty rate that should be paid by webcasters to copyright owners, the US Copyright Office has said.

Last week, September 18, a three-judge panel on the office’s Copyright Royalty Board (CRB) agreed that the Pandora model can serve as a benchmark for how much royalties should be derived from streaming music.

The decision comes three months before the Copyright Office is due to issue a final decision in December on the wider issue of what rate of royalties online radio stations should pay artists.

The office is currently discussing the standard rate for the term beginning January 1, 2016 and ending on December 31, 2020.

According to the CRB, the Pandora, Merlin deal, agreed in August last year, could serve as a model.

Pandora and Merlin’s agreement, which centred on the royalty rate to be paid to artists for the streaming of individual songs, marked the first time the online radio station agreed to pay a royalty rate not set by the CRB.

According to news website CNBC, the agreed royalty rate in the deal was $0.0013 per stream. The CRB’s current rate is $0.0014.

Under the deal, Merlin’s artists are able to customise the metadata on their Pandora web pages making them easier to find.

Maria Pallante, register of copyrights and director at the Copyright Office, said existing copyright law “does not bar the CRB judges from considering directly negotiated licensing agreements that incorporate or otherwise reflect provisions in a webcaster settlement agreement.”

The Webcaster Settlement Act, which was approved in 2009, allows online streamers and rights associations to negotiate their own individual royalty rate separate from the one established by the Copyright Office.

A spokesperson for Pandora said: “We are pleased that the Copyright Office affirmed the admissibility of Pandora’s agreement with Merlin as a valid benchmark in the CRB proceedings.”

“We look forward to the certainty that December’s decision will bring, and are prepared to thrive in a number of potential outcomes,” he added.

US Copyright Office; Pandora; online streaming; Merlin Networks; royalties; music; copyright

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