Pandora Media, the internet radio service, says it has reached a licensing agreement with BMG for hit songs dating back to Sinatra. They include songs by mega-sellers Beyonce and Jay Z.
The deal “ensured a royalty structure that works better for both of us,” Pandora Chief financial officer Mike Herring said at a Goldman Sachs investor conference in New York Thursday.
The two parties came to an agreement over the works of artists that have been represented by giant music licensers Ascap and BMI, which collect royalties for the “performance” of songs — like when they’re played on the radio or performed live.
Pandora, has, for the better part of its history, been in conflict with rights holders over royalty rates. The music owners are trying to transition to world where music music is consumed online through services like Pandora. Pandora recently said that 5 million users have now signed up via in-car streaming music.
The Justice Department agreed earlier this summer to review the age old laws governing the royalty rates that can be charged by rights holders. Those rules were drafted way be for the dawn of the Internet Age.
Pandora nor BMG would talk about the royalty rates agreed upon in the deal.
The company’s stock went up 3.2 percent to close at $26.94 Thursday.