Pandora has been on a mission over the past couple of years to lower the royalty rates it pays music labels. The company argues that it should pay the same rates as traditional over-the-air radio stations and not be subjected to higher fees because it operates on the Internet. Despite numerous campaigns, nothing has changed and roughly 50% of the company’s revenue goes to paying licensing fees. In a last-ditch effort, Pandora this week purchased a terrestrial radio station in South Dakota. The move will theoretically give the company the same preferential licensing terms offered to services such as Clear Channel’s iHeartRadio and others. It won’t be that easy for Pandora, however. The company’s purchase is being challenged by BMI, which claims the purchase is a “stunt” that “makes a mockery of the performing rights licenses and the rate court process.” The group filed suit in the U.S. Southern District Federal Court in New York and is asking the court to set “reasonable, market driven” royalty fees for Pandora.
Being the driving force behind change is never easy, but it’s especially difficult when powerful industry players do everything in their power to crush you. Such has been the story of Pandora, which added an interesting twist to its tale this week. Pandora, a pioneer in Internet radio, bought a terrestrial radio station in South Dakota on Tuesday. The move seems curious on the surface, obviously, but Pandora’s assistant general counsel Christopher Harrison penned a piece on The Hill Tuesday to explain the brilliant maneuver. More →
As Pandora struggles to fight off a new wave of competition from the likes of industry giants like Google and Apple, the company recently announced a new feature that could definitely boost interest in its services. Dubbed “Pandora Premieres,” the new feature allows users to stream new albums in their entirety a week before they are released to the public. Upcoming albums can be streamed on-demand from start to finish for one week until they are released, and then they will be mixed in with Pandora’s standard streaming radio offering. Pandora Premieres is available to Pandora subscribers at pandora.com/premieres, and the company’s full press release follows below. More →
A new study published by the European Commission’s Joint Research Centre has found that illegal downloading doesn’t hurt the music industry. After examining the browsing habits of more than 16,000 Europeans, the research showed that there is actually a positive link between online piracy and visits to legal music stores — so rather than negatively impacting digital revenues, researchers found that music sales can actually benefit from piracy. More →
Apple (AAPL) is rumored to be preparing a Pandora rival dubbed “iRadio” for launch in 2013, but according to CNET’s Greg Sandoval, the company still doesn’t have any major record companies signed up. Sandoval says that Apple’s rumored service is “not being warmly received” by Sony Music Entertainment, Warner Music Group and Universal Music Group, with his sources telling him “a deal with all the majors is nowhere near to being completed.” In September, The Wall Street Journal reported Apple was in talks with the major record labels on a Pandora (P) competitor and in October, Bloomberg reported that the service was on track for launch within the first three months of 2013. More →
Internet music giant Pandora (P) has been having a tough couple of years. After filing for its initial public offering in June of 2011 the company’s stock quickly rose to $20, however it has since tumbled and now sits near all time lows of less than $8. Pandora has seen a large amount of success on paper and it controls more than 70% of the Internet radio market, but investors continue to fear the possibility of a music streaming competitor from Apple. Even though the site recently posted better-than-expect earnings, the majority of its revenue has gone to high royalty fees to artists. To combat this, Pandora is one of the leading voices fighting for the Internet Radio Fairness Act, which is now before Congress. The bill looks to cut online royalty fees and make them more comparable to those paid by radio and satellite radio providers, however it has several opponents. More →
Rumors have once again begun to circulate that suggest Apple (AAPL) is planning to launch an online radio service that will compete with Pandora (P). The Wall Street Journal cited multiple unnamed sources last month claiming that the Cupertino-based company was holding talks with various music labels to offer such a service. The New York Post later reported that Apple and Sony/ATV, the world’s largest music publishing company, could not come to an agreement over licensing fees, however, forcing the music service that was rumored to debut alongside the iPhone 5 to be delayed. Bloomberg is now reporting that talks with major music labels have intensified and a deal could be reached as early as mid-November. Talks are said to be centered around how to share ad revenue and if a deal is reached Apple could launch the service within the first three months of 2013. Shares of music streaming site Pandora fell nearly 15% following the report.
Spotify’s music streaming service is now enjoyed by more than 15 million active users globally, including more than 4 million paying subscribers, according to The Next Web. The news was announced at the Global Business Summit on Creative Content in London on Tuesday by Spotify’s chief content officer and U.S. managing director, Ken Parks, and comes shortly after the company released an update that added free streaming radio for the company’s Android app. Earlier this year, Spotify revealed that more than 20%, or 3 million, of its active users paid for premium monthly access. Despite the milestone, the service still falls short of rival Pandora (P), which recently surpassed 150 million users. More →
Digital music has become increasingly popular over the years, and now it looks like new methods of digital music distribution are finally starting to pay off. SoundExchange, which processes royalty payments for online music streams, confirmed on Monday that it has paid artists and record companies a total of $1 billion since being founded in 2000. “The way the industry is going, it is about multiple revenue streams, not just one,” Michael Huppe, SoundExchange’s president, said in an interview with The New York Times. The company’s quarterly payments to artist and record companies exceeded $100 million for the first time this year. SoundExchange collects money from Sirius XM Radio, Pandora and other forms of Internet radio, and then pays royalties to both artists and their labels. While Internet streaming royalties have increased, they still remain a relatively small percentage of music royalties as a whole. More →
Pandora CEO Joe Kennedy recently announced that the music streaming service had surpassed 150 million users in the United States and was the second most downloaded app in the history of Apple’s App Store. According to the company’s recent earnings report for the first quarter of fiscal 2013, Pandora grew to a record 51.9 million active users, representing a 53% year-over-year increase. The service has a commanding 71.7% share of the top U.S. Internet radio market and controls almost 6% of the total U.S. radio listening market. The company’s total revenue jumped 58% year-over-year to $80.8 million, $70.6 million of which came from advertising and $10.2 million from subscription plans. While advertising revenue increased 62% year-over-year and subscription revenue increased 38%, Pandora still reported a net loss of $0.09 per share. More →
According to CEO Joe Kennedy, Pandora has surpassed 150 million users in the United States and is the second most downloaded app in the history of Apple’s App Store, CNET reported on Wednesday. The Internet radio service has big plans for the future and is working with automakers to integrate the service into virtually all future vehicles. “We truly believe this is just the beginning,” Kennedy said at the CTIA Wireless trade show in New Orleans. Over the past year, the company has faced increased competition from streaming service Spotify, however it doesn’t seem to have affected Pandora’s continued growth. More →
Web-based streaming music provider Spotify is reportedly preparing to launch a new service that will add new radio and content discovery elements to its portfolio. Citing multiple unnamed sources, Bloomberg on Thursday reported that Spotify is developing a new online radio service that will compete directly with Pandora. Due to launch by the end of this year, the ad-supported service will allow users to stream unlimited music through Spotify’s software, and the service may launch with new music content that is not currently available to Spotify customers. It is unclear exactly how the new offering will differ from Spotify Radio, which was unveiled late last year as an artist-based streaming radio service available for free to all Spotify users. The company’s current core product allows Spotify’s 10 million users to stream music from its online catalog in an iTunes-like player that also allows subscribers to search for content, create playlists and share content with friends. More →
Kickstarter is filled with some brilliant, some not-so-brilliant and some very strange ideas, and if user interest is any indication, the Pebble ePaper smartwatch can likely be filed under brilliant. Allerta, the company behind the product, opened a Kickstarter page less than a week ago and has already become the most funded project of all time on the site, which allows users to make small and large donations toward projects they want to back. The company’s initial goal was to raise $100,000, however in the past six days the project has accumulated a whopping $3.6 million in funding. Read on for more. More →