Pandora Media Inc (NYSE:P) recently announced that the cost of its artist royalties summed up to approximately $500 million in past one year. This means that over the decade, the Internet radio service provider has paid a total of over $1.5 billion in the form of royalties to the artists. In his statement, the CEO, Brian McAndrews said that the company took almost 9 years for generating one billion dollar amount for the royalties and then, it took just another year to add 50% more to this total.
The primary source of revenues for Pandora Media is subscriptions and advertising. By getting the artists on board, Pandora Media gets more listeners and attracts wider audience. Therefore, the royalties seem to be quite justified.
Unleashing the potential of Music Industry
The CEO explained that the company helps the artists by finding their target audience. In the meanwhile, they also help the listeners in getting access to the kind of music that they like. By getting these artists to partner with Pandora Media Inc (NYSE:P), the company allows the audience in getting personally connected to their choice of music.
The music makers are often roped in by the Internet radio service providers so as to add refreshing touch to the radio. This gives a broader vision to radio and music’s future.
Pandora’s joint revenue
The revenue of the company flows through ads and paid subscribers. With the combined income, the company monetizing advertising for music makers and also draws monthly payments through listeners.
Apart from the royalties, the company has launched a range of initiatives for transforming the connection between listeners and performers. The company also offers out of the box concepts like audio messaging of artists for the listeners.
The refurbishment in the Internet radio industry is indicating a trend that will pick up faster and will allow listeners to hear something new and interesting.