Friday, August 26, 2011

Pandora Profit

So Pandora is more popular than ever - "Pandora users listened to 1.8 million hours worth of audio over the [second quarter], up to 3.6 percent of the total U.S. listening audience" - but has yet to turn a profit.

Sounds like the culprit are the compensation agreements that they negotiated with the music labels back when the didn't have the audience that they have now. Money quote:
The hope is that in 2014, when Pandora will begin renegotiating its contract with the labels, it will be able to parlay its increased listeners to strike a better deal. The company currently has to pay for every minute of music streamed, not a flat rate for each song licensed.
The danger here is, of course, that if these negotiations do not go well for Pandora, the company may no longer be viable. Here's hoping that the company can parley its large listening base into a royalty agreement that enables to be with us for years to come.

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