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