With Merlin deal, Pandora hopes to make beautiful music with indie artists

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Online music service Pandora has signed a rights deal with Merlin, the indie label global rights agency. It’s the first time the streaming music service has inked a deal with a music rights body, and it’s likely to change the way you discover music on Pandora.

Merlin’s membership includes more than 20,000 independent record labels and distributors, who collectively have a 10 percent share of the global streaming music market, along with indie artists such as Arcade Fire, Lenny Kravitz, and Wilco. The deal only applies to Pandora’s U.S. business.

Under terms of the deal, Merlin members will work with Pandora to increase exposure for indie artists via Pandora’s Music Genome Project, which selects tracks tailored to the tastes of individual users. Merlin members will also get access to Pandora’s metadata and insights, which are derived from Pandora’s 75 million-plus monthly active users, 6 billion stations, and 40 billion bits of listener “thumb” feedback. Pandora’s data will also help Merlin artists determine where their fans are by location, to better help with things like organizing tours.

“For the independent sector, Internet radio is an increasingly important part of the digital market, and we want to see it continue to grow, and grow fast,” said Charles Caldas, CEO of Merlin, in a statement announcing the partnership. “This agreement with Pandora provides a real best of both worlds scenario: a hugely important opportunity to increase our members’ revenues and access unparalleled opportunities for exposure, whilst continuing to support a collective licensing framework.”

The Pandora/Merlin deal is a stark counterpoint to Pandora’s recent squabbles over the royalties it pays. Pandora is now going to negotiate royalty rates directly with Merlin instead of relying on the amount set by the Copyright Royalty Board. That’s likely to lead to higher payments to artists, according to both Pandora and Merlin.

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