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Thread: How can you justify the riches of internet radio?

  1. #21
    MUSCLE13 is offline
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    Quote Originally Posted by SiriusBuzz View Post
    Question: If this model is broken, why are so many companies, with so many investors, competing in the space?
    Venture capital. Very similar to the 90s internet boom and bust. Smartphone radio apps will be no different. If I am Pandora I would IPO as soon as possible - Before 2.0 and before Spotify gets here.

    Cuban got 5 billion from Yahoo for Broadcast.com in the 90s. Did it or any other internet radio company ever succeed? 17 years of this already. I know, smartphones will change it all. Right.....................Same broken model, new device. Ya gotta hand it to Pandora for getting there early much like Broadcast.com did. The coming flood of radio apps is inevitable.

  2. #22
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    So, you are suggesting everyone is wrong? I just want to be clear, Its certainly a valid position. You are contending that the tens of thousands of people working on companies like Pandora and the hundreds of millions being invested are all for naught. That is a bold statement to make. It will be interesting to see how things shake out.

    I, for one, assume that out of those thousands of brains behind Pandora and the likes that at least one person there is smarter than both you or I (simply based on odds) so, there must be something to it all.

    BTW, not everything busted in the 90s, there were winners. If, as you say, radio apps will be no different, then certainly some will come out the victor.
    Charles LaRocca
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  3. #23
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    Quote Originally Posted by SiriusBuzz View Post
    So, you are suggesting everyone is wrong? I just want to be clear, Its certainly a valid position. You are contending that the tens of thousands of people working on companies like Pandora and the hundreds of millions being invested are all for naught. That is a bold statement to make. It will be interesting to see how things shake out.

    I, for one, assume that out of those thousands of brains behind Pandora and the likes that at least one person there is smarter than both you or I (simply based on odds) so, there must be something to it all.

    BTW, not everything busted in the 90s, there were winners. If, as you say, radio apps will be no different, then certainly some will come out the victor.
    Has anybody made money at internet radio in 17 years? Name a company that succeeded in becoming a cash flow machine.

    I don't think they are wrong at all. Was Mark Cuban wrong?. Of course not . He made 5 Billion. Were the early Pandora investors wrong? I doubt it. They will probably make a bunch of money with the IPO.

    Internet radio will be around forever. For Sirius, it is a very good addition to reduce churn. Will any company turn it into a big cash generator? Highly doubtful. Including Sirius. Sirius make its money in sat radio.

    The problem is whether internet radio is a real business model. So far nobody has figured it out. I welcome your suggestions Charles. I would love to know how a company can make it a big cash flow machine. With the horrendous streaming and royalty expenses, and the real lack of a barrier to entry I see fragmentation coming just as we saw in the 90s on PCs for internet radio. Somebody come up with a business model, PLEASE!

    Mark Ramsey asked on his blog a few weeks ago what in the world is terrestrial waiting for to take the internet radio business for themselves. He is a huge proponent of internet radio. I think I know the answer to his question. Everybody is waiting for a decent business model. If Spencer or you or Mel or Pandora or Slacker or Spotify can come up with one I would really love to see it. 17 years.......... The world is changing and the model still sucks.

  4. #24
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    I assume Spencer will take these moves by Google and Apple as competition for Sirius. I hope he doesn't. They are really not that at all. They are an excellent opportunity and I will explain after this link

    http://www.bloomberg.com/news/2011-0...s-ft-says.html

    Downloads on iTunes and probably Google, with music potentially in the "clouds" are basically a replacement for CDs. Sirius already has Amazon and iTunes buy links for each song on their internet player. Mel stated that subscribers will have an opportunity to buy songs through 2.0 radios as well. Logically, one would think if Google opens up a music store Sirius hopefully will seize the opportunity to include Amazon, iTunes and Google music purchase capability in 2.0.

    There is a big difference between retail and media. The margins are extraordinarily different and its not a business that should be acquired or attempted by radio. It would destroy any radio company's margins, and I do me ANY, to enter the retail business. But the opportunity for radio to work with digital music retailers is as clear as day. And Sirius as well as others in the radio industry have already begun to use it to their advantage. 2.0 is sure to continue that after hearing Mel on the earnings call.
    Last edited by MUSCLE13; 02-26-2011 at 02:29 PM.

  5. #25
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    More problems for internet radio

    http://siriusbuzz.com/audio-entertai...l-rhapsody.php

    The flood has just begun. There will be hundreds of thousands more. What a business model. Is Pandora ready?

  6. #26
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    All things Digital excerpts -

    Iím told that Clear Channel will be buying a business that only managed to sign up 20,000 subscribers, who pay $10 a month for unlimited music, since March 2010.

    But Thumbplay ran into the same problem that every other music subscription has faced so far: Lousy record label economics, and a lack of consumer demand.


    http://mediamemo.allthingsd.com/2011...nnel-steps-in/

  7. #27
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    Pittman (the guy who just bought Thumbplay) comments on Pandora -

    “Pandora is a great feature rather than a business. And we want to have all these features and add to the service continually.”

    Emphasis added

    http://mediamemo.allthingsd.com/2011...nnel-steps-in/

  8. #28
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    More headaches for the internet radio

    (Reuters) - A Verizon Communications (VZ.N) executive hinted at a new version of the iPhone and said Verizon Wireless will replace its unlimited mobile data plans with usage-based pricing around the middle of summer.


    http://www.reuters.com/article/2011/...13566720110301

  9. #29
    MUSCLE13 is offline
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    I have very little doubt you will continue to see headlines with dollar signs next to it just like this here

    http://siriusbuzz.com/how-smart-phon...owth-story.php

    There is also not one shred of evidence that internet radio can be a cash flow generating machine. Its been 17 years since the business began, and nobody that is touting it on blogs can point to one internet radio company that has become a big successful business story. NONE!
    Last edited by MUSCLE13; 03-01-2011 at 07:24 PM.

  10. #30
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    Spencer writes

    Whether or not these services make money is not really the issue. The fact that they exist and can bring in consumers is why we need to monitor them.

    Then a poster answers him, sxminvestor, talking about fragmentation. I guess he is probably reading my posts here. The real answer to Spencer on this point is he has been so gung-ho on Sirius competing full force on the internet. Practically berating them for not taking on Pandora with a similar offering (I am guessing 2.0 has some personalization), but in the same vein Spencer is missing one key point in his thesis. Nobody is making big money on internet radio. NOBODY IN 17 YEARS. Pandora has 80 million registered users and they aren't projecting profits yet either in their S-1. And the flood of competition is coming.

    Spencer wants Sirius to go full force into the net when that part of the radio business doesn't make money. So basically if they followed that advice and put big resources into getting a big part of the consumer base to the net instead of sat, Sirius would drastically lower margins and be competing hard in a space with 0 barrier to entry. They would be 1 out of hundreds of thousands. With sat they are 100% of the space. Their EBITDA margins would beg for a lower stock price. Net radio for Sirius is a nice churn reducer. Maybe some added ARPU too for the sat sub base too. Its not a good business and Spencer's thesis is flawed.

    Pittman called Pandora a feature instead of a business yesterday in the article. Does a person following this business think that a feature is what Sirius should be? Sirius is a cash flow business. Internet add-ons are nice. Thats all they are. Prove to us that this is a business Spencer when you guys can't name one internet radio company that has made it a cash flow machine. Do you invest on hope or EBITDA?
    Last edited by MUSCLE13; 03-02-2011 at 07:08 AM.

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