Pandora's Royalty Costs Continue to Outgrow Revenue
On December 4, Pandora, the popular internet radio, reported its third quarter results for fiscal year 2013.
Pandora had 62.4 million active listeners by the end of November, an increase of 45 percent over the same period last year. Listener hours during November amounted to 1.27 billion, up 58 percent from November 2011. Revenue grew 60 percent to $120 million. An impressive number if only content acquisition costs had not grown 75 percent during the same time. Pandora’s royalty costs have outpaced revenue growth for six consecutive quarters now, a fact that doesn’t bode well for the company’s future. For the past quarter, Pandora reported a net profit of $2 million, but announced an expected loss for the running quarter.
Pandora currently licenses music under the compulsory licensing provision of federal copyright law, which allows it to use any song but leads to royalty costs growing almost linearly with increasing listening hours. The company is currently fighting for the Internet Radio Fairness Act (IRFA), which would lower the amount of royalties that Pandora and other internet radio services pay to artists in the United States. In 2012, Pandora spent $160,000 on lobbying, but its support for the IRFA has hurt the company’s reputation within the music industry, as artists and labels are naturally opposing the controversial legislation.
If the IRFA does not get passed and royalty rates remain as they are now, it is hard to see Pandora making a sizeable profit anytime soon, as content acquisition costs will continue to eat up whatever revenue the company generates.
- Forecast revenue growth rate global semiconductor industry 1988-2018Forecast revenue growth rate global semiconductor industry 1988-2018
- Total worldwide prescription drug revenue growth - projection 2016-2022Total worldwide prescription drug revenue growth - projection 2016-2022
- Share of online radio listeners in the U.S. 2000-2017Share of online radio listeners in the U.S. 2000-2017
Marktanteile der größten Musikverlage weltweit in den Jahren 2007 bis 2015
Marktanteile der größten Musikverlage weltweit bis 2015
Weltweiter Umsatz der Musikindustrie in den Jahren 2005 bis 2015 nach Segmenten (in Milliarden US-Dollar)
Weltweiter Umsatz der Musikindustrie bis 2015 (nach Segmenten)
Beliebteste Musikrichtungen in Deutschland im Jahr 2016
Umfrage in Deutschland zu den beliebtesten Musikrichtungen 2016
Entwicklung der Brutto- und Nettoumsätze mit Radiowerbung in Deutschland in den Jahren 2000 bis 2015 (in Millionen Euro)
Brutto- und Nettoumsätze mit Radiowerbung bis 2015
Entwicklung der Anzahl der öffentlich-rechtlichen und privaten Radiosender* in Deutschland in den Jahren 1987 bis 2016
Öffentlich-rechtliche und private Radiosender in Deutschland bis 2016
Entwicklung der durchschnittlichen täglichen Radiohördauer in Deutschland in den Jahren 1995 bis 2016 (in Minuten)
Tägliche Radiohördauer in Deutschland bis 2016
- Iron ore prices monthly 2016-2017Iron ore prices monthly 2016-2017
- Number of stores of the IKEA Group worldwide 2016, by regionNumber of stores of the IKEA Group worldwide 2016, by region
- Annual revenue of IKEA worldwide 2001-2016Annual revenue of IKEA worldwide 2001-2016
- Revenue and financial key figures of Coca-Cola 2009-2016Revenue and financial key figures of Coca-Cola 2009-2016
- Google: global annual revenue 2002-2016Google: global annual revenue 2002-2016
- Who may use the "Chart of the Day"?
- The Statista "Chart of the Day", made available under the Creative Commons License CC BY-ND 3.0, may be used and displayed without charge by all commercial and non-commercial websites. Use is, however, only permitted with proper attribution to Statista. When publishing one of these graphics, please include a backlink to the respective infographic URL.
- Which topics are covered by the "Chart of the Day"?
- The Statista "Chart of the Day" currently focuses on two sectors: "Media and Technology", updated daily and featuring the latest statistics from the media, internet, telecommunications and consumer electronics industries; and "Economy and Society", which current data from the United States and around the world relating to economic and political issues as well as sports and entertainment.
- Can Statista create customized charts?
Absolutely! For information on tailor-made and sector-specific
Charts of the Day, please contact Robin Hüdepohl