Feeds

Tightwad music spaffer Pandora opens box for Wall St to fill with cash

Takes breather from kicking penniless songwriters to plead for more dosh

Providing a secure and efficient Helpdesk

Controversial webcaster Pandora, under fire for running its music streaming business with the iron grip of a plantation owner, is returning to Wall Street for a cash injection.

The company floated in 2011 and its popularity (it has 70 million listeners), revenues (up 55 per cent year on year) and share price (now almost $25) have grown in the last year. Pandora and its largest investor could raise up to $279m – much needed when its cash pile has dwindled to $69m, down from $89m last quarter.

Pandora has been compared to the 1890s robber barons, who unleashed paid thugs to break up unionising labour. But why?

Songwriters earn just $0.00006 per play on Pandora – and these payments to songwriters make up just four per cent of Pandora's "content acquisition" costs. But Pandora thinks this is far too much, and it has filed a lawsuit to slash the statutory rate – a price the government controls in the United States – while lobbying Congress in support of the move. It’s also bought an FM radio station to take advantage of a loophole in the law relating to royalty payment rates.

In a letter to the company in July, Pink Floyd’s members wrote: “A business that exists to deliver music can't really complain that its biggest cost is music. You don't hear grocery stores complain they have to pay for the food they sell,” pointing out that “Netflix pays more for movies than Pandora pays for music, but they aren't running to Congress for a bailout."

Pandora has a point when it notes that US terrestrial radio pays less per-play than satellite or internet radio, but this is changing. The view persists that Pandora is attacking the poorest part of the supply chain simply because it’s the weakest, while the tech bloggerati – which is still furiously fighting the analog-era Man of the record companies – provides cover for the strategy.

Pandora could increase revenue by selling more advertisements (from one per hour to two), or by charging more for them, or by bundling the service into more distribution channels, or by throttling the “free” option and focussing more on paid users. Or a mixture of all the above: it isn’t short of alternative options.

Last year it emerged that founder Tim Westergren is selling $1m of his shares a month, which should see him finally cashed out by 2015. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.