washingtonpost.com wrote:Perhaps it's a well-honed ruse to drum up support from the company's million-plus users who listen to Pandora daily, but there are some dire economics standing in the way of web radio. Last year, the Copyright Royalty Board ordered per-song performance royalties to be more than doubled for use online. Rates will increase from 8/100 of a cent per song per listener to 19/100 of a cent per song per listener by 2010. Pandora's royalty fees this year are projected to hit $17 million, about 70 percent of its projected revenue for the year. The fee increases don't effect traditional or satellite radio, but SoundExchange, an organization that represents artists and record companies, is trying to up those rates as well.
I wonder how much Pandora is getting on a CPM basis on their refresh ads (i.e. change of station, fastforward). They've gotten about 2.5 million uniques and steadily growing (but far from exponential). They'll probably need to raise another round to stay afloat, I'd imagine, despite the fact they have about $22M in funding.
Remember when labels used to pay stations to play their music? It's just never good enough for them is it?
I hope the old guard dies (literally(in a peaceful way )) fast so we could actually get people in charge who know how the internet works and that the new tech can benefit them. But, the new guards pockets are too well lined so it's probably too late. I'm not one who thinks everything should come free but everyday the labels/RIAA one up themselves on the scale of ridiculous. They had some valid complaints before but now I just can't see how anyone other than shareholders can be in their corner.
JTWood wrote:Well, the article says they make $24.2M/yr in revenue. Can you do some math with that?
Interesting, Seems like they have enough to break even on paper but I'd hazard to guess that even if their uniques increase (therefore, rising CPM) from a user base of roughly 15 million, they'll still have relatively lousy cash flow. However, they would roughly make almost $2 off of each user, which is quite healthy.
JTWood wrote:Well, the article says they make $24.2M/yr in revenue. Can you do some math with that?
Interesting, Seems like they have enough to break even on paper but I'd hazard to guess that even if their uniques increase (therefore, rising CPM) from a user base of roughly 15 million, they'll still have relatively lousy cash flow. However, they would roughly make almost $2 off of each user, which is quite healthy.
As they said, they're already out 70% of that revenue just paying the royalty fees. Then they need to pay the technical people that actually make the company work, and the execs that sit around and do nothing...
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by JTWood » Wed Aug 20, 2008 8:54 pm 
)) fast so we could actually get people in charge who know how the internet works and that the new tech can benefit them. But, the new guards pockets are too well lined so it's probably too late. I'm not one who thinks everything should come free but everyday the labels/RIAA one up themselves on the scale of ridiculous. They had some valid complaints before but now I just can't see how anyone other than shareholders can be in their corner.
