As businesses, Pandora and Spotify are divorced from music. To me, it’s a short logical step to observe that they are doing nothing for the business of music — except undermining the simple cottage industry of pressing ideas onto vinyl, and selling them for more than they cost to manufacture.Alternative rocker Damon Krukowski • Discussing how his 90s-era bands, Galaxie 500 and Damon & Naomi, have struggled to make any money of note from Spotify and Pandora. In fact, in the most recent quarter, “Pandora paid a total of $64.17 for use of the entire Galaxie 500 catalogue,” he explains, which splits to roughly 33 cents per song per member for the entire catalog. Krukowski’s in an interesting spot — one where the band he’s best known for has a cult audience, but perhaps not one large enough to sustain a high number of listens. Which is no fun for the band, because they need 47,680 listens on Spotify — or 312,000 plays on Pandora — to earn the equivalent earnings they’d get from one album sale.
Pandora is getting rid of Flash. Their current site pretty much entirely runs on Flash, so a move to HTML5 is a big step for them, and as their site’s tech has gotten creaky over the years, a bit long-overdue. The moral of the story is that Pandora’s facelift looks really, really cool. Not to mention their renovations make the site more social, encouraging people to share music with their friends and making the entire process easier — it’s definitely something to look forward to, especially if you’re an avid desktop Pandora listener. source
» This isn’t a good sign: Generally when a stock has a steep decline immediately after its IPO, it means that the pricing is totally off. In the case of Pandora, the company initially planned to enter the stock market at $7 to $9 per share, but with the current investor fervor over internet companies, the IPO price doubled. Meanwhile, other recently-added tech stocks — LinkedIn and Yandex — have fallen from their peaks, but remain above their IPO prices. In the case of LinkedIn, they’re a solid 52 percent above their IPO price.
» Another sign of strong investor demand: Pandora’s IPO is more evidence of a growing tech bubble, though Pandora’s on a smaller scale than some of the other companies expected to do an IPO soon. Facebook and Twitter, once they do their IPOs, will likely make this look like a walk in the park. Which makes it understandable why some investors might think that Pandora — which hasn’t turned a profit — might get overshadowed a year or two from now. Pandora also faces some tough business challenges because of their reliance on expensive music licensing — ensuring that that their profit margins remain extremely tight.