Don’t Worry, Pandora Only Lost $85.9 Million Last Quarter

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Updated: Pandora shares are now plunging more than 35% in Friday trading, more here.

Will somebody please give this company a business model?

According to just-disclosed financials, Pandora lost a crushing $85.9 million over the past three months alone, the latest in a string of monster quarterly losses.  That compares to a year-ago loss of ‘just’ $2 million, or one-cent per share.  The hemorrhaging is happening despite substantial revenues of $311.6 million, a 30% year-over-year increase, not to mention aggressive gains across advertising and subscription tiers.

The dour financial report comes just weeks after a monstrous, $450 million acquisition of Ticketfly, viewed by many analysts as supremely-overpriced and even unnecessary.  That was quickly following by a $90 million settlement over pre-1972 ‘oldies’ recordings, the latest round in an endless, hostile battle with rights owners.

Those expenses alone left a half-a-billion dollar dent in Pandora’s bank account, while raising serious questions of wild overspending.  Piloting the potential nosedive is Pandora CEO Brian McAndrews, who offered a stunningly blue-sky assessment.  “Our acquisition of Ticketfly will be truly transformative, extending our long-standing strength in music discovery to the large and fast-growing world of live events,” Andrews noted in a manner reminiscent of George Bush’s ‘Brownie’ speech in New Orleans.  “Additionally, with our pre-1972 settlement, we are continuing to strengthen our relationships across the music landscape by resolving an historic source of tension.”

“This progress points to a greater opportunity to work collaboratively toward a bright future for music in a digital era, those who make it, and the fans who love it.”

8 Responses

  1. Avatar
    Angel

    Paul,

    Make up your mind! It’s either they’re ripping off artists or you’re making fun of them for trying different things.

    They are in a no win situation. If they try to make money the cabal of labels (I said labels not artists) will try to extort more from them. If they don’t try to make more money, then really what’s the point of the business? You’d think the labels would work with at least one streaming entity. It’s so antagonistic. The labels want all the revenue without having to foot the bill on anything, artists, songwriters, distribution, or otherwise.

  2. Avatar
    DavidB

    You don’t seem to understand that Pandora does not negotiate with record labels. It runs a service that technically counts as ‘non-interactive’ (however absurd that may seem) and therefore under current US law is able to obtain statutory licenses regardless of artists’ or labels’ wishes. If it had to negotiate terms, it wouldn’t exist.

      • Avatar
        DavidB

        Trying to get them to opt out of the statutory framework so that they could beat down the statutory rate for other labels. I guess to be pedantic I should have said that Pandora doesn’t HAVE to negotiate with labels, but it can where it sees an opportunity to game the system.

  3. Avatar
    Journalism Police

    Brian McAndrews* …. Once again, proof read/fact check your work!

  4. Avatar
    Literati X

    The mere fact that they owed back monies to the 1972 and back dated rights owners implies that agreements and contracts whether statutory or privately negotiated are the hallmark of any musical venture advancement. If the cartels and the top-independents are not addressed–aboard , then the longevity of your ambition to profit from music and around music is in dire–jeopardy. . .

  5. Avatar
    FarePlay

    Paul,

    Does this loss include the $90k settlement payment? Is it a one time write-off?