The Latest on Pandora: Revenues Slated to Hit $40 Million

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Pandora is on schedule to reach revenues of $40 million this year, according to recent comments by founder Tim Westergren.

But profitability?  In a discussion with the Wall Street Journal, Westergren noted that revenues are now doubling year-over-year, though a profitability window was not offered.  Currently, the site claims 30 million users, a considerable crowd.  “We had to push a pretty big boulder over a hill to get to scale, but I feel pretty confident we can get profitable now,” Westergren offered.

Pandora is heavily financed, and Crosslink Capital general partner Jim Feuille received considerable praise for steering a ‘freemium’ model.  That, instead of a subscription-first plan, was the better way to ultimately achieve scale, impact, and hopefully, profitability.  “We would barely register as an impact on the music industry,” Westergren admitted, referring to the earlier plan.

But is there a pot of gold at the end of this rainbow?  Pandora raised another round after a renegotiated royalty rate with SoundExchange, though it remains unclear if the new structure can support profitable, healthy streaming businesses.  One major critic is Michael Robertson, a bruised digital music veteran who argues that the current class of streaming elite – Pandora, Spotify, Imeem, and others – are simply hopeless, at least on the advertising end.  “Any time you have to pay a per-stream fee, the economics don’t work out for an advertising model,” Robertson recently jabbed.