Tag Archives: Pandora
Pandora Pays 70% of Revenues In Artists Royalty Fees, Considering Shutting Down Shop
Pandora is one of the best music streaming websites online today. About 1 million people use Pandora each day because they can create custom stations with their music preferences. Pandora is in the top 10 most popular applications downloaded on the Apple Inc. (NASDAQ:AAPL) App Store too. The one thing that stands between Pandora and success is royalty fees. Royalty fees is the one reason why Pandora is considering shutting down.
Pandora’s project revenue for this year is about $25 million. Seventy percent of that $25 million is going towards paying royalty fees. This means that $17.5 million is going towards royalty fees. This means that Pandora is paying close to $48,000 per day to be able to stream music from mainstream artists.
“We’re approaching a pull-the-plug kind of decision,” stated Tim Westergren, founder of Pandora. “This is like a last stand for webcasting.”
Radio and satellite stations pay a fraction of what Pandora has to pay. TechCrunch points out that the difference between Pandora and traditional radio stations is lobbying power. Traditional radio stations are backed by companies like Clear Channel Communications (NYSE:CCU).
“We’re losing money as it is,” added Westergren. “The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we’re doing is wasting money.”
Pandora started in 2000 and has raised $21.3 million between 2000 and 2005. Previous investors include Labrador Ventures, Selby Venture Partners, WaldenVC, Peter Gotcher, Robert Kavner, Crosslink Capital, and Guy Kawasaki’s Garage Ventures.
Related Link:
1. Washington Post
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Pandora Launches Desktop Application Using Adobe AIR
Yesterday Pandora announced that they have created a desktop application for their streaming music player. Tom Conrad, CTO of Pandora officially announced the desktop application software on the Pandora blog.
“It’s probably been on our to do list longer than any single feature. Today we’re dipping our toe into those waters for the first time with the release of a Beta version of Pandora Desktop.” The Pandora desktop application either gets added on the Windows tray or Mac dock.
Advertisements are embedded in the Pandora application to help the company generate money since streaming audio is expensive.Â
The application was built using Adobe AIR. The Adobe AIR application has to be downloaded in order for Pandora’s desktop application to work.
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Forget June 29th For A Minute & Realize The Importance Of July 15th
[Image credit: Radio And Internet Newsletter: www.kurthanson.com/dos]
Internet radio listeners, forget about the Apple iPhone releasing on June 29th for one minute and realize the consequences of what will happen on July 15th, 2007. Royalty rates for Internet radio will be increasing at an alarming rate and was set by the Copyright Royalty Board in Washington D.C. Two days ago, about 21 Internet radio websites shut down their service to make a statement. It was officially the Internet Radio Day of Silence on June 25th. I was not aware that this was going on until I read a blog post on Yahoo’s blog, Yodel Anecdotal[1].
“The new royalty rates are higher than the revenues anyone can hope to make from related advertising. In other words, we all lose money on Internet radio starting July 15th. Yahoo! has no intention of operating LAUNCHcast radio as a loss-leader,” wrote Ian C. Rogers of Yahoo! Music. Rogers began working for Yahoo! Music three and a half years ago after Yahoo! acquired Mediacode. Rogers wrote a brief history of the situation with the Copyright Royalty Board on the Yahoo! Music Blog.[2]
If the bill passes, Internet radio companies will start losing money. Less than 3% of Yahoo! Music subscribers pay for music and the money made from ads is not sufficient enough for the hike in royalty fees. So if Yahoo! Music keeps losing money along with the other Internet radio companies, keeping them afloat won’t be easy. Many companies cannot afford the royalty rates and may even shut down.
Royalties will increase between 300 and 1200 percent. Internet radio currently pays double of what satellite radio pays and Internet radio listeners jumped from 45 million listeners per month to 72 million listerners since last year. Yahoo! Music has been providing value to Internet radio listeners for years and for free. I don’t want to see the service taken away as it is one of my favorite products made by Yahoo!
For more information, visit http://www.savenetradio.org.
[1] Yodel Anecdotal: Yahoo! Music goes radio silent
[2] Yahoo! Music Blog: Yahoo! Music Goes Radio Silent
Categories 3WK Undergroundradio, AccuRadio, Bagel Radio, Concert Vault, Copyright Royalty Board, DI.fm, Greater Media Inc., KCRW, Lincoln Financial Media, Live365.com, MTV Networks, mymvy.com, Pandora, Radio Paradise, radioio, RealNetworks, Saga Communications Inc., Shoutcast, SomaFM, WOXY.com, XPN, Yahoo!
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