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Digital
Pandora goes into profit
By CMU Editorial | Published on Wednesday 13 January 2010
US-based personalised web radio service Pandora says it went into profit in the last quarter of 2009, ahead of its own financial projections. So, well done them. Tech blog GigaOm quote the digital music service’s CTO Tom Conrad as saying “we became profitable for the fourth quarter of 2009, and now we’re shooting for profits for the entire of 2010”.
One of the original interactive streaming music services, Pandora make money from subscriptions, advertising carried on its free services, and sell-through to downloads of songs. It’s thought the previously reported arrival of the service on mobile, and the resulting boost in users and subscribers, has helped the firm go into profit ahead of schedule.
Given all the chatter about the long term sustainability of the various streaming music services that have launched in the last year or so, this news is possibly heartening. Though pessimists might point out that Pandora’s success has been largely down to its rejection of the truly on-demand music model, which means it pays much cheaper licence fees to the music companies. Conservative growth – including a withdrawal from markets where favourable royalty deals were not forthcoming, such as the UK – may have also played a part.
