April 3, 2012

Pandora Not Expected to Turn a Profit in 2012 or Ever?

With Music Royalty Fees much higher than they are for traditional radio stations- Does Pandora simply have a bad business model?  They rely on 87% of their revenue from advertising. Listeners of Pandora have been resistant to pay for their subscriber service. As a result the more you listen the more they have to pay, so it seems they're always going to be behind the eight ball. We wonder what stockholders in the company think?

Pandora Internet Radio has millions of listeners that enjoy the service across the country. They even claim to be the number one station in some markets, however we have a problem with the content and the programming algorithm called the Music Genome Project they use to select songs. Sometimes it simply doesn't make sense and it can become annoying to skip to the next song. However if you want to discover new music or seldom heard artists- it's absolutely great for that purpose. This is what Pandora had to say about their finances... 

In a recent SEC filing Pandora revealed that they aren't any closer to turning a profit, and expect to report a loss once again in 2012.

"Since our inception in 2000, we have incurred significant net operating losses and, as of January 31st, 2012, we had an accumulated deficit of $101.4 million.
A key element of our strategy is to increase the number of listeners and listener hours to increase our market penetration. However, as our number of listener hours increases, the royalties we pay for content acquisition also increase. We have not in the past generated, and may not in the future generate, sufficient revenue from the sale of advertising and subscriptions to offset such royalty expenses.

Digital Music News notes that Pandora faces an uphill battle, "streaming rates are increasing, not decreasing, and the more listeners Pandora acquires, the greater its royalty obligations become.  Which means that if per-stream royalty rates aren't reexamined or restructured, one of the greatest companies to enter this space may simply be unable to survive long-term." Read more on their take and the future of Pandora...

No comments:

Post a Comment

Add your comments anonymously if you prefer. Remember to share it on your Social Media.

Comments with links to other websites will not be published.

In case you ______ it.

▼ The Latest: Hip Hop + R&B Radio, Media, Sports, and The Culture


Trending News, Topics, + Reports: Radio, Media, Sports, and Culture🎶


More Trending News, Topics, Reports, and Content via Urban Radio


Watch: Ebro in the Morning on Hot 97 - The Breakfast Club Power 105.1


Thanks for reading this post. Add your comments below.

© 2021 UrbanRadioNation.com, All Rights Reserved

. Powered by Blogger.

Popular Posts This Month

Music Stream