Pandora No Longer On Verge Of Collapse, Set To Be Profitable Next Year


After lamenting for years that high streaming-royalty rates would shut down online radio service Pandora, founder Tim Westergren indicates that those dark days are behind the company.

In fact, he claims that Pandora will post a profit for the first time next year, as the service is expected to double its revenue this year to $40 million. 

He also said that the service, founded in 2000, has been adding 50,000 to 60,000 members a day, faster than in previous years, thanks in large part to the company’s iPhone and Blackberry apps, Bloomberg reports:

Closely held Pandora, based in Oakland, California, received a boost in users after making its application available on Apple Inc.‘s iPhone 10 months ago and on Research in Motion Ltd.‘s BlackBerry last month. The iPhone application has more than 5 million users and brings in 18,000 to 20,000 new ones daily, Westergren said.

In light of this growing audience, Pandora plans to increase the number of audio ads it plays to two or three 15-second spots each hour. The service has also added six new staffers, solely focused on audio ad sales, to its 45-member ad sales team.

Despite the cratering ad market, Westergren argues that the economic downturn has helped Pandora target ads on the service:

With budgets tightening in the recession, advertisers are becoming more selective about where to spend money. That benefits Pandora because it can deliver ads to targeted users, making sure commercials aren’t “wasted” on the wrong demographic group, Westergren said.

He also said that after two years of agonizing over Internet royalties, he’s “never been more optimistic than [he is] now” that a resolution to Pandora’s negotiations with record labels, artists and copyright holders will occur soon.


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