Sony/ATV CEO Martin Bandier Says Pandora Deal Will Bring 'Significant' Bump in Royalties

Matt Furman/Redux
Sony/ATV CEO Martin Bandier photographed in 2014.

Last week's announcement of a multi-year direct licensing agreement between Pandora and Sony/ATV was predictably short on details. A letter to songwriters from Martin Bandier, the publishing company's chairman/CEO, continues that trend but does offer some insight into the deal.

In the letter, acquired by Billboard, Bandier repeats earlier assertions that Sony/ATV is working to "bring the outdated licensing system in the U.S." into the digital age. When the deal with Pandora kicks in on January 1, songwriters will see a "significant increase" in their royalties, he writes.

Bandier also makes it clear that Sony/ATV has only licensed the shares of the songs that they control and not a blanket 100 percent. He writes that the deal with Pandora is part of a larger strategy to reform licensing in the U.S. and "ensure that all digital music services" recognize the value of a songwriter’s work.

As previously reported, Pandora’s agreement with Sony/ATV arrives two months before its ASCAP license is due to expire. Also by year’s end, the Copyright Royalty Board will set rates for the performance of sound recordings for 2016 to 2020. Pandora has argued for lower rates, while record labels are pushing for a significant increase.

Read Bandier’s full letter:

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As I’ve previously described to you, we at Sony/ATV have been working to bring the outdated licensing system in the U.S. in line with the current digital age to achieve improved performance royalties for you, our songwriter. 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 licensing system in the U.S. will continue. As I said in the deal announcement last week, our strategy is to ensure that all digital music services recognize the indispensable value that the words and music of a song bring to their businesses.

If you have any questions or would like to discuss this deal please feel free to reach out to me.

Regards,

Marty

Find more on the Pandora/Sony/ATV deal here.