Pandora acquires Next Big Sound to boost artist data offering

Controversial US internet radio firm Pandora has agreed a deal to acquire online music analytics firm Next Big Sound for an undisclosed sum.

Despite widespread outcry over Pandora’s royalty payments to artists/labels and songwriters/publishers, the company said its NBS purchase was the latest step in its “commitment to become an indispensable partner to the music industry” and would “accelerate [its] strategy of harnessing data for the benefit of music makers”.

It’s a good time to be a music analytics company: the news comes a year after Spotify snapped up The Echo Nest for €49.7m and months after Apple bought out UK firm Semetric for €45m.

Pandora, which attracts 79m monthly active users, is expected to turn over $1bn this year – around half of which will be paid out to the music industry.

The platform, which is only licensed in the US, Australia and New Zealand, currently pays 2.5% of its annual revenue to BMI, 1.85% to ASCAP and a $0.0014 per-stream royalty to SoundExchange.

Next Big Sound is used by tens of thousands of music makers, labels and marketers looking for data and insights about artists and their fans.

It will now sit alongside Pandora’s Artist Marketing Platform (AMP), which offers both Artist Insights as well as the opportunity for artists to record audio messaging that they can then use to target fans in specific locations.

Next Big Sound will be used by Pandora to offer artists more data-driven tools, while Pandora’s own data will be pushed into the NBS system.

It remains to be seen if companies who currently offer Next Big Sound their data – including Pandora rival Spotify – will continue to work with the company post-acquisition.

“WE’re thrilled to be joining pandora. We’ve found a partner who believes data has the power to transform the music industry.”

Alex White, Next Big Sound

“The combination of Pandora’s listening data and Next Big Sound’s analytical capabilities will create a vital source of data,” said Brian McAndrews, CEO at Pandora (pictured).

“Next Big Sound shares our passion for music and respect for those who make it. I’m incredibly excited to unleash the combined potential of our two companies and have the Next Big Sound team join us.”

“We are thrilled to be joining Pandora,” said Alex White, CEO at Next Big Sound. “In them, we’ve found a great partner who, like us, believes data has the power to transform the music industry.”

Next Big Sound was launched in 2009. According to Pandora, the music industry relies on NBS to:

  • Quantify the relationship between social media and revenue.
  • Understand the impact of marketing and promotional events such as TV appearances, press interviews, and new releases.
  • Drive marketing decisions for artists, managers, agents, publishers, promoters, labels and brands across the global music industry.
  • Deploy prediction algorithms to help identify high-potential artists at the earliest possible stage.

Music Business Worldwide

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