Pandora Files To Go Public
techcrunch.com
techcrunch.com
It is my understanding that they have hired musicians to listen to each of the songs they stream then rate each one according to dozens of factors. The factors include things like "acoustic guitar", "strong melody", "high studio production values", "gritty vocals", etc etc. Then they are able to do some kind of cluster analysis on that dataset. So that if you put in "Stone Roses" you hear music from that band but then others that have a similar sound.
I find about 2 or 3 new bands that I really like every week. I have actually started buying CDs again.
This is what makes Pandora unique from Last.fm, or Ping, or other "social" music discovery sites. Instead of recommending songs according who likes them, it learns what kind of music you like. It looks across genres and artists to the actual musical features of each song.
One thing that I really like about the service is finding artists that seem to lead to lots of other great songs. It isn't always who I think it is. For example on a lark I put in "New Radicals" because I liked one of their songs and I was so impressed with how well that defined a particular sound. When I put in big names like the Beatles or Rolling Stones I don't think I left those stations defined for very long. I wonder is there is some kind of structure to the what Pandora has calculated that could show which bands or songs seem to be most influential.
P.S. My friends are always complementing me on how awesome my music is. I try not to take too much credit for it.
I want to see the future of radio be one of full choice with great suggestions, not pandora's restrictions. I think Pandora has built amazing suggestions, but it's not perfect and I want to push for the next generation of music experience.
FWIW, you've caused one rabid Pandora fan to give it a look.
It's been saved from the brink of death so many times, the actual employees and founders really aren't going to get a tremendous windfall for their efforts.
"About 86 percent of Pandora’s revenues ($78 million) comes from advertising, the rest ($12 million) comes from subscriptions."
which made me think, wow, Pandora is kind of like a newspaper, magazine, or cable TV network!
I assume they have intelligent reasons behind the IPO - can someone explain the rationale?
Think about Tesla, which is much more in red but had a great IPO.
Their revenues in the same 9 months of last year were $31m, so they have tripled their revenues year on year. Over the same period their costs less than doubled.
If one were to extrapolate this growth rate forward by just one year (a bit crude, but makes a point), they'd end up with $270m revenue, on $170m costs so $100m profit.
They are now breaking even - which is a simple metric of a sane business/proven model, doing significant revenue and growing very quickly. So now they are in an attractive state for the markets.
In terms of strategy, Techcrunch shows their first VC round was back in 2000, with significant further rounds in 2004 and 2005. One could safely assuming the overriding factor is that VCs will be looking for an exit.
An IPO will also provide the company with significant injection of operating cash, along with liquid paper (stock) with which they can use in further acquisitions
Pandora's revenue is threatened by so much, RIAA contracts, pirating, advertisings race to zero ( via google ), etc...
They know this, and they will need to reinvent themselves to be worth anything. As a result I predict they will blow the 100 million on radically new business methods. Considering the success rate of music companies... I am worried.
Go find a company from '97 that had $70 million in revenue and was breaking even.*
If there is a company, it might have had absurdly inflated ad-based revenue when CPMs were like $30.