As I’m writing this article, I’m listening to music from Pandora (80’s, 90’s and Today if you’re curious). The other day they filed for IPO, which would make it a publicly traded company on the US stock market. What’s crazy about that is that the site is essentially one page with a Flash player on it and an ad. How can they possibly be making enough money to expect people to want to invest in them? 80 million users is how.
Pandora had revenues of $90 million in 2010 from ads, while subscribers pay $36 a year to not hear those ads! That’s freaking ridiculous. Another thing that is ridiculous is how much the music industry charges Pandora and other online radio stations like Slacker and Spotify (UK).
In 2009, Pandora was losing money they were paying 119% of their revenue for music licensing. They are hoping to raise $100 million by going public. I’m sure they will get it pretty quick.