Pandora Enjoying Stability, Challenges Still Ahead
July 14, 2010 7:39 AM
comment(s) - last by
Internet radio service Pandora continues to expand, but challenges still lie ahead
Pandora has been in existence around 10 years and continues to fight for control of online music in a continually evolving industry. It seemed unlikely the small Pandora staff would be able to help the company avoid closing down at any minute -- an issue that has been left behind.
The popular online service has almost 60 million registered users, and includes 500 simultaneous ads playing to music listeners.
"In the last year, I feel like we've finally cracked the nut on
how to effectively monetize
a streaming radio service," said Tim Westergren, Pandora founder, in a statement to
. "Our intention is to build a radio business that looks a lot like the traditional radio business, with a scalable mechanism for selling national and local advertising so we can do everything from big, branded national campaigns to local pizza joint specials. They can be delivered as graphic ads, as audio ads, as video ads. We're pitching big ad agencies who have historically bought broadcast radio and pitching them to shift that money to the Web."
I've had the chance to chat with Tim a few times in the past, and there is something that's evident: he loves what he does. There was great concern Pandora wouldn't be able to survive after the controversial Copyright Royalty Board (CRB) announcement in March 2007. Since then, Pandora faced questions regarding survival for the next two years, with some analysts especially concerned regarding the higher royalties Pandora has to pay.
As it currently stands, Pandora must pay royalties for every song played and for each listener who listens to the song. The company also can pay 25 percent of all collected revenue, with copyright groups securing the higher figure. Pandora executives worked with SoundExchange to find a fair solution, and the company has seen recent success.
Around 70 of its current 190-person employee list joined in 2009, and Westergren hopes to recruit another 70 employees before the end of 2010. Although its main office is in Oakland, Calif., Pandora also has locations in New York City, Chicago, Los Angeles, and Dallas.
Even though things are looking better -- $30 million of Pandora's estimated $50 million in revenue went to royalties -- which is an issue that Pandora hopes to work on in the future.
This article is over a month old, voting and posting comments is disabled
Why the Difference?
7/14/2010 1:33:02 PM
I'm confused as to why Pandora has to pay different royalties than a regular radio station does.
My personal theory on it is they have to because they can discretely quantize their user base and therefore must be charged for it. Which, IMO, is insanity.
Has this been adequately explained elsewhere?
RE: Why the Difference?
7/14/2010 7:53:12 PM
Actually, it's because the record companies don't want to pay every artist that deserves it! Otherwise, the little record companies, radio stations, and distributors might start to get a bigger piece of the pie and ruin it for the big companies. See article below, it explains it a lot better.
I really like Pandora. I hope they make it. I can barely listen to broadcast radio, it's so pathetic. the article explains why.
RE: Why the Difference?
7/19/2010 12:55:08 PM
My belief? Pandora has absolutely zero bargaining power. The do not make nor create any of the core services (i.e. music). They do nothing more than repackage the content into another form.
The record companies understand this and 'strong arm' Pandora, which in my opionion is fair but it sucks for them. I don't know how you can begin to quantitize revenue from advertising let alone control demand from users when everything they do is solely dependent on the quality/quantity of someone elses work.
They are at the mercy of the record companies and rightfully so.
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov
Latest By Michael Barkoviak
Iran to Ramp Up UAV Development
August 19, 2010, 9:25 AM
Department of Homeland Security May Be Unable to Launch Full UAV Fleet Until 2024
August 17, 2010, 8:28 AM
Israel Discusses Plans to Purchase Lockheed F-35 Lightning IIs
August 13, 2010, 9:43 AM
Boeing UAV Able to Loiter Above Target For 10 Days
August 3, 2010, 9:05 AM
Cybercrime Costs Businesses Big Bucks
August 2, 2010, 7:25 AM
UK Beefs Up Cyber Security Efforts
August 2, 2010, 7:10 AM
Subaru Clarifies Addition of Wi-Fi in 2011 Outback
July 28, 2010, 7:14 AM
UAE Claims BlackBerry Poses Security Risk
July 26, 2010, 8:26 AM
BitTorrent Operator Seeking Donations for Legal Defense
July 26, 2010, 8:26 AM
MPAA Chooses Former Sen. Kerrey as New Head
July 26, 2010, 8:21 AM
Apple Adds New Password Protection for Third Party iCloud Apps
September 17, 2014, 8:50 PM
Facebook Tests Moments App, Aims to Keep Your Private Memories Private
September 17, 2014, 5:46 PM
Russian Hackers Compile List of 10+ Million Stolen Gmail, Yandex, Mailru
September 11, 2014, 11:41 AM
House Minority Leader Pelosi Criticizes FCC's "Fast-Lane" Net Neutrality Plan
September 9, 2014, 4:15 PM
Smarter Than Siri? Cortana Adds Game NFL Game Winner Prediction
September 3, 2014, 4:12 PM
Apple Says Nude Celebrity Photo Dump Wasn’t Result of iCloud, Find My iPhone Breach
September 2, 2014, 3:26 PM
Most Popular Articles
HTC Preps Nexus 9 With Nvidia K1 64-Bit "Denver" SoC, Android L Onboard
September 10, 2014, 10:21 PM
Quick Note: Buy an Xbox One Sept 7-13, Get a Free Game
September 4, 2014, 10:42 AM
Apple Announces Its Smartwatch: The $349 Apple Watch
September 9, 2014, 2:09 PM
Dell Announces "World's Thinnest" Tablet: The Venue 8 7000 Series
September 11, 2014, 8:51 AM
T-Mobile Launches Un-carrier 7.0, Beefs Up Wi-Fi Calling
September 11, 2014, 2:56 PM
Latest Blog Posts
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information