Music News: Pandora pays $0.0012 royalty per stream

Dust2

http://www.billboard.biz/bbbiz/indus...05205492.story

Quote:

Due to its agreement webcasters made with SoundExchange, Pandora's royalty for each non-subscription play will increase from $0.00102 in 2011 to $0.0011, $0.0012, $0.0013 and $0.00140 in the next four years. That's an annual increase of roughly 8% and an increase over four years of 37%. The per-stream royalty for subscription plays will increase 47% over that time span.

1000 streams = $1.02 royalty (2011 rate)
1000 streams = $1.40 royalty (2015 rate)

http://www.sec.gov/Archives/edgar/da...50713/ds1a.htm

In 2010, Pandora revenue was $138 mil. It pays the music industry $69 million in royalty (50% of its revenue).

In the first quarter of 2011, Pandora revenue was $51 mil. It pays the music industry $29 million in royalty (57% of its revenue).

Quote:

Revenue in the quarter was $51 million, up 136% from $21.6 million in the prior year quarter.

It looks like Pandora will generate more than $200 million this year (at their rate of growth).

This is much less than VEVO and Youtube.

VEVO (including VEVO videos play on Youtube, CBS, AOL etc...) pays $7 for every 1000 streams.
Youtube pays $3 for every 1000 streams.
Pandora pays $1.02 for every 1000 streams

Expect to see more artists putting their whole album (audio form) on VEVO like Lady Gaga just did on Monday. Their pay rate is 7 times better than Pandora.

Reza

oh ok so then do paid subscriber services like napster and rhapsody do the same? ive always wondered.

evo

A whole 38cents by 2015

Ahmed.

Hehehe this awesome, so much money

Dust2

http://www.sec.gov/Archives/edgar/da...50713/ds1a.htm

Look at their rate of growth

2008: $19 mil revenue
2009: $55 mil revenue
2010: $138 mil revenue
2011: ????? ----------------------$51 mil in the first 3 months (expect more than $200 mil in 2011)

The company's updated S-1 filing, related to its planned IPO, shows remarkable growth. Registered users were 94 million at the end of the quarter (ended April 30), up 15% from the previous quarter and up 77% from the prior-year quarter. Active users at the end of April were 29 million, up 17% from the previous quarter and up 89% growth from the prior-year quarter. (Pandora defines an active user as "the number of distinct registered users that have requested audio from our servers within the trailing 30 days to the end of the final calendar month of the period.")

Dust2

Quote:

Originally posted by uclaboi2003

oh ok so then do paid subscriber services like napster and rhapsody do the same? ive always wondered.

I'm not sure. Pandora is ad-supported. It does have an ad free for $3 a month.

I think Pandora operates differently from Rhapsody and Napster.

The royalty rate of $0.00102 in 2011 to $0.0011, $0.0012, $0.0013 and $0.00140 in the next four years was negotiated for internet radio companies.

http://gigaom.com/2009/07/07/pandora...dio-companies/

Quote:

According to Pandora CTO Tom Conrad, the deal cuts minimum per-stream royalty rates for pure-play Internet radio providers by 40-50 percent. Companies in that category will pay the greater of two rates: either a per-stream rate that increases annually until 2015, or 25 percent of U.S. revenues. (For now, Pandora itself will pay the per-stream rate.)

Is rhapsody and napster a pure-play internet radio providers? If they are, then yes. If not, then they have different royalty contract with the labels.

Dust2

Pandora: $1.3 bil valuation.

http://venturebeat.com/2011/06/02/pa...ipo-valuation/

Online radio station Pandora has priced its shares between $7 and $9 in its upcoming initial public offering on the New York Stock Exchange (NYSE) — giving the cloud music company a valuation of nearly $1.3 billion, according to an updated S-1 filing with the Securities and Exchange Commission.