How can you justify the riches of internet radio?
I want to see you justify the riches of internet radio concerning this matter -
Excerpt -
This offers the first public look at the company's finances -- and Pandora isn't yet profitable. The popular site posted a net loss of $328,000 on revenue of $90.1 million in the first nine months of its most recent fiscal year. In the fiscal year ended Jan. 31, 2010, it lost $16.8 million on sales of $55.2 million.
Its biggest expense is the royalties it pays for the music it streams. As Pandora's audience grows, so do those costs, which reached $45.4 million in the first nine months of 2010. That is twice what Pandora spent on them in the same period a year earlier.
http://money.cnn.com/2011/02/11/tech..._ipo/index.htm
Now we all know per song royalty rates are going up every year and we also know that they will have to be renegotiated in 2015.
But besides royalty and streaming costs, if Pandora isn't making money with 80 million registered users how will they make money when everybody and their grandmother is putting out personalized radio apps on smartphones in the next few years including competition from Sirius with 2.0?
You keep posting that internet radio is where Sirius should concentrate in order to grow its business and make the big bucks, when internet radio hasn't made money ever, even for Pandora with 80 million registered users.
Thanks.
PS - I do believe Pandora is strategically IPOing before Sirius XM 2.0 comes out and effects their business negatively.
Good article from the WSJ
Excerpt-
Pandora Files for IPO, But Can It Ever Make Money?
Pandora mostly has been unprofitable.
That’s not totally a surprise, of course. The music royalty fees long have been a question mark about Pandora’s business. Heck, even Apple can’t make real money from iTunes. Pandora fought hard several years ago to rework the music industry’s royalty fee structure. But now we know just how much those royalties are denting Pandora. On a percentage basis, those costs are down from about 80% of revenue in the fiscal year ended Jan. 31, 2009. But still: How sustainable is Pandora’s business if it has to pay out half or more of its revenue just for the rights to music?
Pandora doesn’t expect the problem to abate soon. The company said it expects its revenue growth rate will slow, because of competition and the “maturation of our business.” And here’s what the company said in its IPO filing about its profits (or lack thereof)
http://blogs.wsj.com/deals/2011/02/1...er-make-money/