Adele's 25 Album Missing from Spotify, Good for Pandora (P) - Macquarie

Macquarie analyst, Amy Yong, highlights the fact that Adele's album "25" is streaming on Pandora (NYSE: P) and that the deal with Sony/ATV eliminates the potential for strong arm tactics by the company withdrawing music from the service.

The analyst believes that the Registry is supporting a flat structure where all labels pay in a uniform rate configuration. This precludes a tiered system based on the identity or category of the record company that owns the recordings performed by a webcaster. While this is a near-term win for Pandora, it will remain a contentious topic and is subject to change when negotiations begin again in a few years.

Pandora needs a price point of US$0.165/100 songs to see positive '16 EBITDA. The analystt believes, that each US$0.01 drop in the CRB rate equates to a US$1.67 increase in fair value.

Either way, Ticketfly and Rdio will act as a hedge if the final rates are higher than expected as Pandora’s losses will be mitigated with portions of its revenue stream now diverted away from traditional radio.

The firm maintained an Outperform rating and $19 price target on P.

For an analyst ratings summary and ratings history on Pandora click here. For more ratings news on Pandora click here.

Shares of Pandora closed at $13.73 yesterday.

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