Hacker News Reader

Interesting analysis.

Based on their cost of $0.02 cents per listener hour, I wanted to calculate how many hours per day my $36 yearly payment equates to (ignoring their operational costs):

($36 / $0.02) = 1800 hours per year

1800 hours per year = 4.93 hours per day

View on HN

Sounds like the pricing structure all works together very well, then. 5 hours per day sounds like a good point which plenty of people can easily eclipse, but the majority will not, keeping the service profitable.

Licencing is hardly there only cost.

Yes, but they said it was 50% of revenues. I believe Pandora is profitable, so the sum of all other costs must be less. This means that the breakeven point is actually somewhere between 2.5-5 hours. 5 hours per day is not a magic number- I think 4 or 3 also sound perfectly fine, based on the usage patterns I see.

Pandora is actually operating at quite a big loss:

http://finance.yahoo.com/q?s=P&ql=1

I don't see much value in an analysis that ignores operational costs.

Reply on news.ycombinator.com