See How Pandora’s Royalty Costs Continue To Outpace Revenue [CHART]
Pandora's recent trip to Washington to ask for lower rates didn't go too well and today it's stock is being battered by it's own forecast of future losses. With 62.4 million active listeners by the end
of November, 1.27 billion listener hours, and revenue of $120 million, you'd think they'd be able to build a profitable business. This chart so why it may never happen:
Pandora’s royalty costs have outpaced revenue growth
for 6 consecutive quarters, according to Statista.
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Gee. Maybe they should charge more for their product since it looks like costs are higher than revenue.
Agreed. SiriusXM earns about $130 in revenue per customer and Pandora earns about $4.50. Do customers perceive the Sirius experience to be more than 20 times as valuable as the Pandora experience? If you’re a Stern fan, sure, but for music fans? I think Pandora could be a lot more aggressive about figuring out ways to get people to subscribe. My guess is that their board will probably insist on it.
This chart shows no real essential information. just percentage (growth) doesnt say anything about actual costs. If they have revenue of 120M but content aquisition costs of 20M they would still make a lot. sure, long-term costs would catch up, but this chart is misleading somehow.