Pandora Reaches 40 Million Active Users, Sees No Impact from On-Demand Services
Pandora Reaches 40 Million Active Users, Sees No Impact from On-Demand Services

DISH Picks Odd Time to Show Interest in Pandora
-- According to numerous media reports, satellite television operator DISH Network may buy an interest in, or outright acquire, personalized Internet radio company Pandora Media.

The comment made by DISH CEO Joseph Clayton, formerly CEO of Sirius Satellite Radio. Clayton also named Sirius and Hulu as companies DISH might be interested in. Media reports of Clayton's comments sent shares of Pandora up 7.48% on Monday and an additional $5.93 on Tuesday. Shares closed Tuesday at $17.50, $1.50 above the offering price but well below the $20 price shared opened at on the first day of public trading.

How odd. A deal would have been much cheaper before Pandora went public two weeks ago. Now the company has a market value around $2.8 billion. Until the IPO it was a money-losing Internet star with a long line of investors who need an eventual exit. Now that investors have pushed up the stock in anticipation of a possible acquisition that would offer value the company at a premium, Pandora would be an incredibly expensive deal for DISH. After all, the company's expensive acquisitions often involve satellites or white space. And it paid all of $320 million for Blockbuster earlier this year.

Clayton's interest makes some sense. DISH parent company Echostar has shown interest in music before when it bought a large amount of Sirius XM debt (Sirius XM later took a bankruptcy-saving loan from Liberty Media that gave Liberty a 40% stake in the company).

But it would be hard to imagine Pandora pairing up with DISH. It needs far broader reach than DISH's roughly 20 million subscribers. Pandora would probably not add enough value to lure new DISH customers. Its per-user advertising revenue would add little to DISH's subscription fees relative to the price DISH would have to pay to acquire the company. And DISH is not an ideal way for Pandora to expand into new markets -- existing ecommerce companies like Amazon that have footprints in many attractive countries seems like better options.

Pandora CEO Calls For Lower Webcaster Royalties
-- Speaking of Pandora's expansion into new markets, the company's founder Tim Westergren called for lower webcaster royalties and a centralized licensing scheme. Costs and burdens of these two issues have kept Pandora out of the United Kingdom and stand to impede its attempt to expand into countries other than the United States.

"That lack of parity really needs to be addressed," Westergren told MusicWeek. "Perhaps the Pandora story will emphasize that and bring it front and centre now it is a more public company. We are confident that we have a good business in the long run but there is still some work to be done on that."

And on the need for centralized licensing, Westergren said, "Having one place to go to get licences is really valuable for a company like Pandora. Our hope is that it becomes the norm over time."

Is Nashville Becoming a Better Place for Innovtation?
-- At his Sound Logic blog at, digital entrepreneur Mark Montgomery explains how his hometown of Nashville is becoming a better place for music innovation.

"Incumbent businesses are not saved by legislation and litigation; they are reborn through innovation. And innovation is spurred through investment… Today, Tennessee becomes the second regional partner to the Startup America initiative, with the goal of providing focused, coordinated support to create better ideas (by proxy, helping the bad ones fail sooner), and connect them to capital more quickly. The state is throwing an additional $30 million dollars into the kitty (on top of the $200 million it has already put to work via the TNInvestco Program); more accelerators are launching; and new funds are being created to finance new deals being created."

Montgomery is a member of the Music Council established by Nashville mayor Karl Dean to increase the city's standing among both musicians and the music industry. Dean sees music as being vital to the city's future and he has instilled lofty goals into the Council. "Simply put, Nashville has the potential to be the epicenter of the new music business," Montgomery told me last year.
(Sound Logic)

The Orchard YouTube Streams Surpass 4 Billion
-- Digital distributor the Orchard has surpassed 4 billion YouTube streams of the videos in its control. The company explains that its automatic content feed enables a large quantity of videos to be fingerprinted so that advertising revenue can be shared with the rights owners of the audio, music videos, television shows and movies. The Orchard then imports the streaming data into its clients' dashboards.

The company sums it up this way: "YouTube has become a content discovery service and a marketing tool as much as a significant revenue generator, positioning them as one of the only such hybrid models in the industry."
(The Daily Rind)