Adele’s new blockbuster album, ’25’ has shattered first week sales records. Some of this is definitely due to the fact that she withheld the album from Spotify, Apple Music and other streaming services. The reason she was able to do this is that the streaming services need to license the content directly from artists and labels. Since she’s a powerhouse, she holds enough sway to maintain those rights herself.
So how did Pandora get access to Adele’s latest? They license under SoundExchange, which is a statutory exemption. Anyone who meets the requirements of their standard license (you can see it here), basically gets access to everything.
There are strict limitation as to what constitutes SoundExchange compliant. In essence, the music service needs to mimic radio. This is why Pandora only lets you select an artist, and you won’t hear more than 3 songs per hour in that artist “station”.
The more artists opt-out of the subscription services, the better it will become for Pandora and other internet radio services (like iHeartRadio and Slacker).
And the more reason new music services have to work within the SoundExchange exemption. It really is the only way to have a legal music service and hope to build a profitable business in the long-run.
If you are thinking of starting a music service, or are already building one and have questions about licensing and strategy, hit me up. I’d love to talk to you.
Story idea from USA Today.