Does Pandora Have a Future?

For those of you not familiar with Pandora, it is a platform devoted to the music genome.  What this means is that you can listen to a particular artist that you like, then Pandora will suggest other bands you may like based on that choice.  Pandora uses a complex system to analyze the music to make these recommendations, it’s truly a unique service.

Unfortunately, the free streaming music platform that allowed us to listen to great music while discovering new artists is in danger of closing.  Pandora is having trouble paying the ridiculous royalty and as a result may have reached the end of their figurative rope.  Pandora does generate a significant amount of revenue (25 million) but are forced to give up around 70% of that revenue to cover the fees.

Pandora has become extremely popular with monthly traffic of around 2.5 million (according to compete.com, actual number are most likely higher) and the traffic has been growing at a rapid pace.

Pandora also has one of the most popular iphone applications that allows users to stream music directly to their iphones.  According to this article by the Washington Post, Pandora attracts a whopping 40,000 new customers every day.  Tim Westergren who founded Pandora says, “We’re approaching a pull-the-plug kind of decision.  This is like a last stand for webcasting.”

According to Michael Arrington from Techcrunch, Pandora may have to be our sacrificial lamb.  Let’s hope Pandora will be able to work something out so that we can keep enjoying their unique platform.

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