Pandora rises out of the streaming music rubble
Pandora founder Tim Westergren said he hopes Pandora will remain profitable in 2010 after posting its first profit in the fourth quarter of 2009.
In an online world saturated by struggling streaming music services, Internet radio site Pandora appears to be making all the right moves.
Last year, the 10-year old company recorded its first profitable quarter, doubled its subscription base to more than 40 million users and took in $50 million of revenue. The company also announced several new partnerships that allow users to take Pandora with them in the car and on the TV.
Pandora certainly seems to have found its sweet spot, making it a standout among other streaming services that have not been able to make it on their own. Social music site iMeem was scooped up by MySpace in December for just $1 million, and Apple (AAPL, Fortune 500) bought cloud-based music service Lala for not much more. Analysts say even mighty MySpace Music may be unable to sustain itself for much longer.
The company attributed its ability to rise through the rubble to its substantial user growth over the past year. With a rapidly increasing number of subscribers, Pandora has been able to attract better advertisers and demand higher ad prices.
But growth is a double-edged sword. As more users listen to Pandora, the company has found itself doling out more in royalties. Company founder Tim Westergren said Pandora has finally managed to strike just the right balance.
“We’ve been able to grow our audience to attract advertisers and do so without going bankrupt,” Westergren told CNNMoney.com. “We’ve gone out of business many times, so it definitely wasn’t a smooth path, but we’re starting to realize the benefits of scale.”
Source:cnn.com
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