Here are two ideas. One is surprising, at least to me:
Pandora is in trouble, and Big Music is surprisingly sad about that
The labels used to loathe the streaming music service. Now they love it. It may be too late.
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
Pandora’s days seem numbered. And the music business isn’t happy about that.
To the news you’ve heard before: Pandora, once a music streaming pioneer, now looks like a music streaming casualty. While competitors like Spotify and Apple Music are booming, Pandora has been treading water.
As Bloomberg’s Lucas Shaw reports, Pandora’s management is under investor pressure, yet again, to explain why they shouldn’t sell the company. Sirius XM remains, as always, the logical buyer.
The new, new thing is that Big Music — the music labels and publishers that dominate the industry — aren’t gleeful about that prospect.
That’s a change from years past, when Pandora was the company the music guys loved to hate, because Pandora had figured out how to build a big streaming music service without charging for music, and without making deals with Big Music.
Instead, Pandora took advantage of U.S. copyright rules that let them pay a set price for each song they streamed, without ever negotiating with the labels and without ever charging consumers. You will not be surprised to know that the Big Music guys argued that Pandora built a multi-billion dollar business with their stuff without giving them their proper cut.
But that was then! Now, things are different in two significant ways:
- Pandora ended up negotiating licenses directly with the big guys.
- Pandora now plans to launch a subscription service, which will mirror the ones sold by the likes of Spotify and Apple Music.
“They’ve seen the light,” said a Big Music executive, explaining why the industry would like to see Pandora stay afloat. To spell that out:
- Now that Big Music has direct deals with Pandora, Big Music has leverage. If one of the big labels has a problem with something Pandora is doing, it can pull its music and cripple the service.
- Big Music wants as many subscription services out there as possible, because Big Music is trying to stuff the free music genie — that popped up nearly two decades ago in the Napster era — back in the bottle. They want you to think that on-demand music, whenever you want, wherever you want it, is something you pay $10 a month for. Not just something you get for free with an internet connection.
All of this seems obvious in retrospect. But sometimes — at least if you’re me — you can’t figure out obvious things until someone says them out loud.
This article originally appeared on Recode.net.
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