Stock Update (NYSE:P): Copyright Royalty Board Issues Ruling in “Web-IV” Pandora Media Inc Rate Case

Pandora Media Inc (NYSE:P), the world’s largest music discovery platform, announced that the Copyright Royalty Board (CRB) released the rates and terms for the “Web-IV” rate-setting proceeding, establishing the sound recording performance royalty rates paid to performing artists and record labels by Internet radio services for the period of 2016-2020. While the company has not received the full supporting decision, the following is based on the company’s initial reactions to information posted on the Copyright Royalty Board’s website.

Pandora participated in the proceeding to ensure a vibrant, open and sustainable music marketplace. The CRB set the following rates and terms for services operating under a statutory license:

Per-Performance Rate Ad-Supported Subscription Blended*
“Web IV Rate” Decision for 2016 $0.0017 $0.0022 $0.00176
Current “Pureplay Rate” for 2015** $0.0014 $0.0025 $0.00153

*Pandora’s projected blended rate for 2016.

**From 2006-2015, Pandora paid rates and terms under a Pureplay Agreement negotiated with SoundExchange. In 2015, the “Web III” or statutory rate was$0.0023.

The rates and terms announced today take effect January 1, 2016 and represent a 15 percent increase over Pandora’s 2015 effective per-performance royalty rate.

“This is a balanced rate that we can work with and grow from. The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music,” said Brian McAndrews, chief executive officer of Pandora. “Working collaboratively with partners across the music industry is a top priority as we connect listeners with music they love, and artists with their audience.”

Pandora continues to aggressively invest in initiatives to transform how fans and musicians connect. Examples include the recent acquisitions of Ticketfly and Next Big Sound, as well the planned purchase of assets from Rdio. Additionally, Pandora rolled out cutting-edge programs like the Artist Marketing Platform (AMP), including Artist Audio Messaging, that benefit music makers by harnessing the power of Pandora’s immense data and scale to connect with their audiences.

While statutory licensing remains an important aspect of a vibrant music ecosystem, Pandora recently expressed its intent to secure “win-win” direct licensing agreements with labels and publishers to drive future growth. Examples of progress include publisher licensing agreements with BMG, SONGS, Sony/ATV and Warner/Chappell, as well as label agreements with Merlin and Naxos.

“This decision provides much-needed certainty for both Pandora and the music industry,” continued McAndrews. “We are moving full-steam ahead with our ambitious plan to continue to build the world’s most powerful music discovery platform.” (Original Source)

Shares of Pandora Media Inc opened today at $13.44. P has a 1-year high of $22.60 and a 1-year low of $11.38. The stock’s 50-day moving average is $12.86 and its 200-day moving average is $16.51.

On the ratings front, Pandora has been the subject of a number of recent research reports. In a report issued on December 10, Pacific Crest analyst Andy Hargreaves maintained a Hold rating on P. Separately, on December 9, Albert Fried’s Richard Tullo maintained a Sell rating on the stock and has a price target of $11.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Andy Hargreaves and Richard Tullo have a total average return of 31.1% and 4.4% respectively. Hargreaves has a success rate of 66.1% and is ranked #42 out of 3632 analysts, while Tullo has a success rate of 55.9% and is ranked #643.

Overall, 2 research analysts have rated the stock with a Sell rating, 10 research analysts have assigned a Hold rating and 10 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $17.77 which is 32.2% above where the stock opened today.

Pandora Media Inc provides internet radio services on smartphones, tablets, traditional computers and car audio systems, as well as other internet-connected devices.

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