Pandora Shareholders Approve Takeover by Sirius XM,

[Y2kTheNewOldies]

https://variety.com/2019/digital/ne...reholders-approve-roger-lynch-out-1203122984/

Also in the article Roger Lynch has been removed from the CEO seat as part of the talks between Pandora and SiriusXM

Pandora Media’s stockholders approved Sirius XM’s proposed takeover, and with the deal set to close shortly Roger Lynch will be out as Pandora’s CEO.

Lynch will exit once the deal officially closes, the company announced after the shareholder vote Tuesday. Sirius XM CEO Jim Meyer will lead the combined company, which brings together Pandora’s music and audio streaming business and Sirius XM’s core satellite-radio business. Lynch was named CEO in September 2017 after heading Dish Network’s Sling TV.

In addition to Lynch’s departure, other senior Pandora execs also exiting include general counsel Steve Bene, CFO Naveen Chopra, and chief human resources officer Kristen Robinson.

Sirius XM’s all-stock acquisition of Pandora, first announced in September, is expected to “close shortly” subject to customary closing conditions, according to Pandora. Originally valued at $3.5 billion, the deal is now worth less than $3 billion with the decline in Sirius’ stock since it was announced.

Back in November, Lynch — in announcing third-quarter 2018 earnings — had said, “I couldn’t be more excited about Pandora joining forces with SiriusXM. A combined Pandora-SiriusXM will create the world’s largest audio entertainment company, bringing Pandora additional resources to accelerate growth and building on SiriusXM’s leadership in the car, subscription expertise, and unique content.”

 

[MikaelaArsenault]

So will they still be two separate apps?

 

[CTListener]

So will they still be two separate apps?

Time will tell. SiriusXM corporate hasn't given any details of how the two companies' synergies will unfold yet.

I wonder if Lynch had any idea he wouldn't be part of the combined company's future when he gave his "couldn't be more excited" statement. If he did, he certainly did a good job of playing the good soldier and doing the right thing on the way out. I'd imagine he's also getting a golden, or at least a silver, parachute to tide him over until he lands his next job. Surprised to read that SXM is giving Pandora's lawyers the boot, given SXM's legal eagles' spotty record in recent disputes.

 

[TheBigA]

Time will tell. SiriusXM corporate hasn't given any details of how the two companies' synergies will unfold yet.

They're still running Sirius XM as basically two different companies, so I'm not expecting lots of synergies. Just lots of cost cutting.

 

[MikaelaArsenault]

https://techcrunch.com/2019/01/31/pandora-powered-channels-will-come-to-siriusxms-app-this-year/amp/

 

[TheBigA]

https://techcrunch.com/2019/01/31/pandora-powered-channels-will-come-to-siriusxms-app-this-year/amp/

So what? Pandora already has its own app. It just sounds like branding rather than something unique.

In my view, Pandora would benefit more by carrying Sirius channels than the other way around.

 

[CTListener]

So what? Pandora already has its own app. It just sounds like branding rather than something unique.

In my view, Pandora would benefit more by carrying Sirius channels than the other way around.

Maybe SXM sees an opportunity to get labels and artists to engage in more "legal payola" and push their music to Pandora subscribers on "curated" channels like Billy Joel Radio, The Beatles Channel, Pitbull's Globalization, The Garth Channel, etc. They are very big on big-name branding of channels, as you probably know. Three channels, in facct, still carry the names of dead people: Siriusly Sinatra, BB King's Bluesville and Tom Petty Radio, so SXM management has found a way to milk dollars from artists' estates and/or their labels even after they've died. Whether Pandora users would be overjoyed to find a channel featuring nothing but Billy Joel songs and old concerts, with Billy supplying stale anecdotes recorded years ago between numbers, remains to be seen.

 

[TheBigA]

Looks like SXM sees an opportunity to get labels and artists to engage in more "legal payola" and push their music on "curated" channels

Didn't see that mentioned, but you may be right. The big problem with Sirius is they've run out of channels. Every time they add one of those "sponsored" channels, they have to drop something, and that pisses off subscribers. The advantage of the internet is there's no limit on the number of channels. However, it's been my experience that those channels are not particularly popular. They're more vanity projects. So they end up just becoming revenue streams. The old Pandora refrained from doing that kind of thing.

 

[TheBigA]

This is a fascinating interview, that confirms a lot of the things broadcasters have been saying about Pandora:

https://radioink.com/2019/01/31/what-are-pandoras-challenges/

I'm not sure this problem is as easy to solve as they think.

The problem isn't as much about growing revenue and controlling expense, and by that, we mean music royalties. Adding listener hours won't fix the fact that as usage increases, so does the royalty rate. The way the royalty was structured, increased usage costs more money. Increased revenue will cause SoundExchange to demand a higher rate in the next negotiation. So any success will be penalized by the Royalty Court.

 

[tested]

Pandora is a great app, but it is a horrible business model. The recording industry hates streaming and has structured royalties to make sure that it is nearly impossible for streaming services to make a profit. The more listeners it gets, the more it costs and they can't hardly get enough listeners to generate enough revenue to make this profitable because the cost of royalties goes higher. I suspect SXM might actually be more interested in Pandora for its advertising technology. I can hear local ads on my Pandora app. Maybe they could use that kind of thing on the SXM app too.

 

[TheBigA]

I suspect SXM might actually be more interested in Pandora for its advertising technology. I can hear local ads on my Pandora app. Maybe they could use that kind of thing on the SXM app too.

That's a good point. Sirius can't advertise on their music channels. But Pandora gives them a bigger platform for their advertising. And as you say their ad insertion technology is likely better than Sirius. Of course, as you say, the music industry hates Pandora's free ad-supported channels. I'm expecting they will also use their larger overall platform to negotiate a better music royalty than Pandora has now. That will REALLY piss the off. Tim Westergrin basically gave away the store when he started Pandora. He's gone now, and the new owners have a much different view.