Pandora just killed itself

“Pandora stock took another beating Monday, closing down almost 8% to $31.39. Although the stock is still up 18% year to date, shares have plummeted 22% since Pandora hit an intraday high of $40.44 on March 5. And things just may be getting worse,” Richard Saintvilus writes for TheStreet. “Aside from the news that Apple is reportedly in talks to bring National Public Radio to its competing iTunes Radio service, Pandora is now feeling the stress of high royalty payments that it must pay to artists. This is a result of its inability to monetize its traffic, even though the company commands close to 7% of the radio listening market.”

“Looking to beef up the bottom line, the company has opted to raise the rate of its premium Pandora One platform. With Apple’s possible entry into non-music content, now doesn’t seem like the best time for Pandora to ‘turn up the volume’ on its customers,” Saintvilus writes. “It’s not just your standard increase. Pandora is jacking prices by 25%.”

“This price hike now placed Pandora One at 99 cents higher than what Sirius charges for its receiver-based streaming service,” Saintvilus writes. “Plus, there’s the risk of Pandora losing its stickiness factor. There were those who were unwilling to switch from Pandora to iTunes Radio. Pandora just might have given its listeners, many of whom are disparaged as ‘freeloaders,’ a reason to test the alternatives.”

Read more in the full article here.

Related article:
NPR brings live streaming news to Apple’s iTunes Radio, more channels on the way – March 24, 2014

19 Comments

    1. If Pandora considers non-premium subscribers as “freeloaders”, then perhaps Pandora doesn’t want all that advertising revenue? The “freeloaders” likely generate a majority of Pandora’s revenues. If people don’t click the ads, that may be a fault of the advertiser for the content, Pandora for the targeting, or simply that the consumer has the radio playing and isn’t watching the screen for ads to tap.

      However, I find Pandora’s ads highly intrusive and annoying, so I switched to iTunes Radio. I don’t use it enough to pay Pandora a monthly fee, and I already subscribe to iTunes Match, so it makes sense.

  1. Running yet more ads won’t help either as people are desperate to get away from the sheer volume already invading everything. How refreshing to watch cable shows without commercials (radio as well). Show runners can avoid breaking up their stories into neat 12-15 minute segments and can structure more like movies.

    1. I’m still not sure where people like you think the funding for non-premium network TV content comes from. You know everything that is on non-premium channels is paid for by advertising, right?

      1. Of course as I’m saying it’s an unimaginative solution. Ads are invasive, annoying and all too often the majority of ads are not even targeting the right consumer. I think it the last alternative, not the first thought of monetizing strategy.

        1. There’s no way to win I guess is my point. You can pay Netflix to watch SOME of the shows you might like (I can’t watch most of the ones I want to see) or listen to Pandora and deal with ads, but both are under a lot of pressure to turn a profit. And you’re going to pay an ever increasing monthly fee or have more ads shoved at you for them to stay in business.

          As far as seeing more relevant and targeted ads, you’ll have to give up your privacy for that to happen — as I’m sure it’s all Google dreams of.

          I’m not pro advertising, but there’s no way I’m buying every show I want to watch. I’ll gladly watch Cosmos on an app and put my iPhone down until the ads stop running.

          1. If you do run ads then people will look to other ways around it is also my point. I understand of course what you’re saying. But how much profit is enough? Too many of these companies have CEO’s who feel hyper-entitled and feel as though they are “special” and should be over enriched. Wrong.

            1. Agree, instead of lauding companies that increase profit slowly year over year the media/analysts bash them if they’re not growing as fast as possible.

      1. Yes, I prefer my propaganda to come from loud old white men who lie constantly and whose views are totally at odds with reality rather than government propaganda like … um … hmm … don’t do drugs! Yeah! Lying government weasels!! /s

  2. I like pandora and will probably pay the f**k you tax brought on by ASSCAP (sic) et al. I tried iTunes similar product and it is light years behind pandora|one.

    I like NPR I don’t use it as my only news source but there are quite a few articles that are worth listening/reading. FoxNews and CNN, (BBC and all other) are all so biased you have to carefully vet the articles and even then take them with a grain of salt.

    I used to be republican till George W, showed me republicans don’t even care about themselves, and I then extrapolated that the same must be true of democrats. Who now Obama has shown this is true as well. I’d jump on the libertarian party bus but the machines of the democrat and republican party are so well oiled they will destroy all comers and it will happen from within. So I am a man without a party.

  3. Obviously, Pandora didn’t ‘kill itself’. Hit whoring headline hype.

    What is accurate to say is that the RIAA and their minions (ASCAP, BMI…) are busily continuing to attempt to kill Pandora and all other ‘net radio’ with their draconian royalty demands. Keep in mind that the RIAA would like royalty payments well over 6x higher than what the court just ruled Pandora must currently pay. 6x.

    Reality: Net radio is free marketing for the RIAA. It is the exclusive way I currently learn about and BUY new music. If not for net radio…

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