Will Pandora Play ‘The End’ Soon? Royalty Rate Hikes Could Be Its Demise

15 Comments

imageSome potentially sad news today for music fans who like their music free, but don

15 Comments

Pepler

you know i rely on pandora for my music, its sad that if she suts down i will have to go else were for music like last.fm. wich by the way sucks. its sad that she is one of the greatest music sites out.

Ryan

We recently launched an internet radio platform called Highnote. Listeners discover new music on highnoteradio.com, and independent artists have free distribution with paid promotion opportunities. At the core is the promotional platform we're building which is designed specifically for streaming music. Labels and independent artists get promotional exposure for their new music in the most natural way – played directly after artists that are similar. Ex: I am an artist that cites Coldplay and U2 as influences, I can get my track played into streams after users hear songs by Coldplay and U2. As an artist trying to build a fan base, I only pay for qualified traffic to my web site or MySpace page, where I sell music & merchandise directly.

The crucial thing here for listeners is relevancy — we provide enough popular songs in streams to keep the listener engaged. And we quickly stop playing promoted music if people don't like it (though it happens less often than you'd think, because the promotions are so targeted).

feedback welcome, we're at http://www.highnoteradio.com

Joseph Weisenthal

The Last.FM app should be a satisfactory substitute to anyone if Pandora actually goes down.

The economics for Last.FM probably aren't much better, but they've got the deep-pocketed parent. It's also the kind of site that people go to, rather than just stream music from, so there's more of an ad/transactional opportunity.

I wonder what Westergren hopes to see happen following this article.

Jonathan

it would raise awareness to the nextgen applications and state of the industry if a big mover like this went down.

might be a good thing if there is a silver lining to this mess.

AWOLSam

By show of hands, how many of you pay for a music subscription (not including Sirius or XM?)

Judith

I would definitely pay a subscription fee for ad-free music. The only reason I haven't paid a fee so far is that Pandora keeps talking about shutting down, and I don't see the point of paying for a service that is always on the brink of shutting down. Meanwhile, posting ads within the audio stream or just on the startup screen about contacting your congressperson is a good idea that I hope Pandora picks up on.

christian

i don't think this is the end of Pandora, but I do think the company will need to lay-off some folks. From .08cents to .19 cents is a big increase! However, the music genome project produces a better music recommendation engine than anything I've come across. Perhaps Pandora can figure out a better way to monetize the recommendations?

Nick Stamoulis

Hopefully this won't be the demise of Pandora – they're an amazing site and maybe they will think of better ways to monetize soon.. let's hope!

AWOLSam

No one is going to pay a subscription, when they can get it for free elsewhere (note the demise of Yahoo Music Unlimited and MTV's venture into online radio.)

So, why is Pandora singled out vs satellite and FM radio? Simple. Control.

We forget that music is a business. Radio is just the means through which record labels push their product. If you have some control over what people hear and when, then you can promote the sale of a new CD, concert or merchandise by playing that song more often before a release, (note how Disney plays High School Musical and Hannah Montana to death.)

FM and Sirius XM Satellite Radio get away with lower royalties because they play the game. If you want a monetizable internet radio that plays the music you like, then you have to take something like XM or AOL Radio and combine it with a personalization engine like Insignia from Dash Media http://www.dashmediausa.com. Add some inobtrusive audio ads from someone like RL Radio http://www.rlradio.com and now you have a revenue generating radio platform, with low royalties and automatic personalization.

The Critical Advertiser

The revenue potential of each platform is not equaled, therefore a flat rate doesn't make sense. Pandora has tremendous opportunity to earn huge revenue because they operate on a two-way interactive appliance, the Internet. Sirius can only rely on increased subscription rates or ad support via commercials which would cause channel surfing.

Pandora requires the user to start the music stream. Engagement opportunity #1 for advertiser. After it plays for a while, the music stops and it asks "are you still listening?" The viewer again needs to touch the computer.

If Pandora would turn to a value-exchange ad model, where the viewer "earns" the music stream after completion of a brief full-screen ad, they could deliver huge metrics for advertisers and create an unstoppable financial engine.

Don't take my word for it… which I'm sure you won't…. or ask the user, if their choice is to see their music go off the air – OR – trade their attention for free music streaming, which will they go with? Dare I say Pandora could even offer a subscription product for users who want to unstoppable music ad free.

The Critical Advertiser

Amanda Natividad

I would really hate to see Pandora get shut down and I have to agree with Jamie on their iPhone app. Their app is one of the very few free ones I would actually shell out money for. Nothing beats plugging your iPhone into your car's speakers, blasting Pandora tunes while crawling through the LA rush hour.

Drew Robertson

Pandora could start by placing :10 sec ads asking their listeners to call their congressman and complain. Heck as they can scrape the IP address of most viewers, they could even direct the listener directly to his congressman. In any case it would be a better way to soften them up for real ads in the near future.

Jamie Poitra

I'll also be extremely disappointed to see Pandora go away. Their iPhone application is one of the better ones and was an immediate success for a reason.

Zach

I hope you're right that this is all a ploy. That I can deal with. But somehow, I think we're going to lose one of the best music sites out there very soon. And then, it won't be about listeners incurring the music industry's wrath, but the other way around.

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