NEW YORK (CNNMoney.com) -- In an online world saturated by struggling streaming music services, Internet radio site Pandora appears to be making all the right moves.
Last year, the 10-year old company recorded its first profitable quarter, doubled its subscription base to more than 40 million users and took in $50 million of revenue. The company also announced several new partnerships that allow users to take Pandora with them in the car and on the TV.
Pandora certainly seems to have found its sweet spot, making it a standout among other streaming services that have not been able to make it on their own. Social music site iMeem was scooped up by MySpace in December for just $1 million, and Apple (AAPL, Fortune 500) bought cloud-based music service Lala for not much more. Analysts say even mighty MySpace Music may be unable to sustain itself for much longer.
The company attributed its ability to rise through the rubble to its substantial user growth over the past year. With a rapidly increasing number of subscribers, Pandora has been able to attract better advertisers and demand higher ad prices.
But growth is a double-edged sword. As more users listen to Pandora, the company has found itself doling out more in royalties. Company founder Tim Westergren said Pandora has finally managed to strike just the right balance.
"We've been able to grow our audience to attract advertisers and do so without going bankrupt," Westergren told CNNMoney.com. "We've gone out of business many times, so it definitely wasn't a smooth path, but we're starting to realize the benefits of scale."
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http://money.cnn.com/2010/02/18/technology/pandora/index.htm
Over the last year Pandora has been adding roughly 35,000 subscribers everyday. They attribute the majority of their success to the iPhone app. where subscribers can listen to Pandora anytime. Also, they announced they have a partnership with Ford to put Pandora in new vehicles through the automaker's new bluetooth stereo system. Do you think Pandora would be successful without the iPhone app. and eventually will Pandora be more prominent than terrestrial radio?
3 comments:
I do think Pandora would be successful without the iPhone, but not without the use of some type of mobile device radio. What I am attempting to say is that I think some other mobile provider would have made a device that filled the iPhone's spot and helped Pandora or perhaps another company rise to the top.
I think we are a long way from replacing terrestrial radio. I do think we are seeing a change in radio where almost all stations have an online site that can be accessed by mobile device or computer and that number will only increase.
I love this idea of taking Pandora with me wherever I go. The application is so refreshing and it offers the choice of preferred music as well as the chance to discover new artists that you didn't know you loved.
Big props to Pandora.
I am a current user of Pandora, and I think what seperates them from other online radio websites is the fact that Pandora's website has the capability to reference listeners to other music similar to what they like. This is good for the recording industry,too, because Pandora introduces listeners to upcoming artists.
I believe that Pandora is taking a risk going mobile, and I believe that it will be interesting to see if it will be a lucrative move for them in the long run.
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