Pandora Says Merlin Ruling Means Lower Royalty Payments Ahead

(Hypebot) – Did indie label licensor Merlin hand Pandora a big win that could mean lower payments to artists and labels?

Pandora's stock soared yesterday on news that it will likely pay lower royalties starting in 2016. After its stock trades were paused twice Monday on high volume, Pandora closed at $20.77 up 5.6%, and appeared to be slipping back a bit further on Tuesday.

Pandora stock rose yesterday on news of a Copyright Royalty Board decision to consider a 3rd payment structure negotiated by indie licensing organization Merlin regarding U.S. Pandora royalty payments when setting new rates.

While no details of the Merlin deal we're disclosed, a Pandora spokesperson implied that it was lower that current statutory rates set by the CRB. “We are pleased that the Copyright Office affirmed the admissibility of Pandora’s agreement with Merlin as a valid benchmark in the Copyright Royalty Board proceedings,” said Dave Grimaldi, Pandora spokesman.

We have reached out to Merlin for comment.

In this rate proceeding, the CRB will determine the rates for webcasting from January 1, 2016 to December 31, 2020. The CRB is expected to issue a ruling no later than December 16th.