Pandora Media Inc. (NYSE: P) saw its shares shoot up earlier in the day, but slowly they have been giving a little. This is following the announcement by the Copyright Royalty Board (CRB) regarding what rates online streamers might pay for content.
The company announced that the CRB released the rates and terms for the “Web-IV” rate-setting proceeding, which established the sound recording performance royalty rates paid to performing artists and record labels by Internet radio services for the period of 2016 to 2020.
The “Web-IV Rate” Decision for 2016 as set at $0.0017 for ad-supported, $0.0022 for subscription and $0.00176 for blended. This is a slight change from the current “Pureplay Rate” for 2015, which was $0.0014 for ad-supported, $0.0025 for subscription and $0.00153 for blended.
Ultimately these rates and terms will take effect on January 1, 2016, and represent a 15% increase over Pandora’s 2015 effective per-performance royalty rate.
Brian McAndrews, CEO of Pandora, commented:
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. 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.
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McAndrews continued:
This decision provides much-needed certainty for both Pandora and the music industry. We are moving full-steam ahead with our ambitious plan to continue to build the world’s most powerful music discovery platform.
Shares of Pandora were up over 20% to as high as $16.23 early Thursday, but it seems that the news might not be as amazing as once thought.
Shares of Pandora were last seen trading up about 12% at $15.02, with a consensus analyst price target of $18.76 and a 52-week trading range of $11.38 to $22.60.
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