Feeds

Pandora to spark music IPO goldrush?

I said no, no, no ...

Build a business case: developing custom apps

Internet streaming site Pandora has filed for an IPO – a rare event in the tech world and even rarer for music companies. The flotation values the company at $100m.

Pandora started its personalised streaming operation in 2005, but withdrew from all overseas markets including the UK in 2008. It reckons income in the first nine months of 2010 was $90m with a loss of $328,000; for 2009 the company lost $16.7m on income of $55m. So it is heading in the right direction. It said that 86 per cent of its income is from ads, despite the introduction of a $36 annual ad-free higher-bitrate subscription programme in May 2009. Pandora claims to have 80 million registered users and a catalog of 800,000 songs, with listener hours growing fivefold over two years.

Exactly half of Pandora's income is payed out in royalties. These are scheduled to increase – as is the fierce competition for listening minutes from Rdio, Spotify and other internet-based streamers.

Pandora was founded as an attempt to commercialise the ultimate music trainspotting venture, the Music Genome Project, an attempt to catalog hundreds of song "attributes" so a computer algorithm can process them. MGP was co-founded by Tim Westergren, former Pandora CEO, in 1999.

"The typical music analyst working on the Music Genome Project has a four-year degree in music theory, composition or performance, has passed through a selective screening process and has completed intensive training in the Music Genome's rigorous and precise methodology. To qualify for the work, analysts must have a firm grounding in music theory, including familiarity with a wide range of styles and sounds. All analysis is done on location," apparently.

So now you know.

Is the Pandora IPO herald a wave of public flotations of music startups? Not likely. Pandora has notably sought alternatives to the web: by embedding itself into "smart" TVs and cars. This remains its best bet – a transformation into a respectable B2B music service provider. But the costs and competition in retail land are ferocious.

In the SEC prospectus, Pandora owns up to ropey internal financial reporting, which it is trying to improve, and admits that deals to embed Pandora in cars are non-binding – they don't oblige the manufacturer to do anything at all. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.