Oakland-based Pandora Media soared on Thursday, the first trading day after the Internet music company received a favorable ruling on royalty rates that Pandora and other online streaming companies must pay for content.
Pandora s shares jumped about 14 percent on Thursday after the decision on how much Pandora must pay artists.
This is a balanced rate that we can work with and grow from, said Brian Andrews, Pandora s chief executive officer. The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music.
Pandora said it s a top priority to work collaboratively with partners across the music industry is a top priority. In October, Pandora agreed to pay $90 million to temporarily resolve issues related to recordings created before 1972.
This decision provides much-needed certainty for both Pandora and the music industry, Andrews said.
Under the ruling from the Copyright Royalty Board, royalty rates will rise at the rate of inflation.
Late Wednesday, the royalty board ruled that the rate for non-subscription services would rise to 17 cents per 100 plays. The current rate is 14 cents.
Several analysts raised their ratings on Pandora, moves that helped underpin the company s shares on Thursday.
The rate decision seems likely to clear the path for a global deal, potentially allowing Pandora to launch around the world at some point in 2016 or later, Barton Crockett, an analyst with investment firm FBR, said in a research note.
The front desk at the Pandora offices in Oakland. BANG Staff photo
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