JimPastrick said:
Considering that the original strike price was said to be around $8, I'd say that the house won.
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PANDORA A PYRAMID SCHEME!
- Thread starter joshzz
- Start date
Considering that the original strike price was said to be around $8, I'd say that the house won.
I wonder if Verizon’s announcement of no more “unlimited” data plans after this month has taken the steam out of the stock. The smart phone was going to replace radio listening but now if it is not “free” a lot of people will think twice. IMHO there is a sizable percentage of the internet’s users do not want to pay for anything especially music. I just wish they would make $25 a share so I could have safely short them and still been protected with options.
congsec51 said:
The problem with Pandora is that the more users they get, the more royalty they have to pay for music. It's a very regressive system that penalizes success. So they're running faster and faster to keep up with the increasing cost. They need a cash cow.
The thing that moved Amazon into a different area was the Kindle. Pandora needs a Kindle. What would it take to get you to buy a Pandora Kindle? Probably it would have to record music. Boom! RIAA lawsuit. Can't do it.
Last I checked, Pandora's fees were on a per-song basis, meaning if they can make more money then the it costs per-song, they can become profitable regardless of how much the subscriber base grows. The royalties are high, but as long as they can make money exceeding the costs of their royalties on an hourly basis, then the argument of increasing costs based on an increase of users is invalid. It is like saying if more people buy Toyota vehicles, their costs will go up due to the increase of raw materials and therefore prevent them from being profitable. We know this is not true, because if they make more money on a vehicle than the vehicle costs, then they can be profitable. With an increase in sales they can actually become more profitable. Pandora is no different. If Pandora can make more money on every listening hour than it costs them to offer it, then in theory they should become more profitable with more users, not less.
The Kindle did not make Amazon profitable. In fact, the WSJ believes Amazon may even be selling them at a loss. The Kindle helped in other ways, such as by increasing the sales in ebooks, but the Kindle itself did not make Amazon profitable.
The Kindle did not make Amazon profitable. In fact, the WSJ believes Amazon may even be selling them at a loss. The Kindle helped in other ways, such as by increasing the sales in ebooks, but the Kindle itself did not make Amazon profitable.
Casey said:
Two things: Those costs keep increasing every year, and competition is driving the price per song down. People don't want to pay per song. They badly need another revenue stream. Because this one is not good. As you said, the Kindle helped Amazon in other ways. Pandora has no other way right now. Pandora needs a Kindle.
I hate to bring a semi-old thread back up, but how on earth are they making money from mobile? I'd assume that's pretty popular. There are NO audio ads and only occasionally do I see a little banner ad on the player promoting ringtone downloads or something. Listening is unlimited, also.
My personal experience was that I just deleted Pandora off my IPhone. As expected, the app and service was free for about three uses, then it went into the per song subscription mode. It will be interesting to see how many of those eighty million "subscribers" who move from free into pay will do as I did.
Oh, and by the way...good old radio is still free and easily available without purchasing a new device.
Oh, and by the way...good old radio is still free and easily available without purchasing a new device.
carolinaradio said:
They have ads for some mobile devices, others not. They have mentioned that they make quite a bit off people purchasing the music they hear through the Amazon or Itunes link. As a whole though, I am not sure if they profit from the mobile service. They have kept the amount of ads on the low side to help drive up the usage versus their competitors.
TVradioguru said:
Are you sure we are talking about "Pandora" here? They do not offer a per-song subscription mode. There are two levels of service, free and Pandora One. Both have unlimited listening on mobile devices. They have never required anyone to buy Pandora One.
I've noticed some on certain tracks on my Blackberry Torch after checking it, but that's all. More don't have them than do. I would think they'll eventually put restrictions on the mobile listening.
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