Pandora's Deal With Thousands of Indie Labels Changes the Game

NEW YORK (TheStreet) -- If you haven't heard about it yet, TheStreet has details right here. But, longish story short, Pandora (P) signed a direct deal with Merlin, a group that represents thousands of independent record labels.

There's not much to say about the agreement that hasn't already been said. It's a good deal for both Pandora and the labels/artists. I would be surprised if others didn't follow suit, signing similar deals with Pandora. From my perspective the most important aspect of the pact is that it represents Pandora's first wide-scale sharing of data with musicians and their labels. This will help artists make better decisions with respect to touring and other activities, which should help them cultivate revenue beyond royalties.

There's something else equally as interesting ... something that makes me think others -- even major record labels -- could follow Merlin's lead.

Pandora has always claimed it's not a "taste maker" or an "arbiter of taste." In other words, it doesn't tell listeners what they should be listening to, rather it lets the Music Genome Project do the work based on the actions of individual listeners. So it's not going to favor one song or artist over another; it's an objective process driven by data and user preference. But this Merlin deal appears to change that.

The way I read it, Merlin artists will receive at least some type of preferential treatment on Pandora. Here's a blurb from the official press release:

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