Pandora
Question 2
Slide 1 and 2– Pandora Horizontal conflict
Pandora used to have its target on desktop usage. Now it is switching to mobile and cars, with mobile adds growing faster than any other form. (We are going to see the numbers later).
This happens to create an internal horizontal competition among its vehicle distribution channels and causes a necessity to invest resources in each of them at the same time.
Slide 3 – Pandora vertical conflicts
Pandora’s membership v.s. advertising sales
Pandora’s focus is to increase the advertising sales, especially in mobile devices, but at the same time it needs to grow the number of users. Right now Pandora is struggling to keep its membership rates increasing, and also has to face seasonal demand and competition threats.
Pandora Renata – Question 4
Slide 1 – Threats to success (with a graph)
Cost structure:
. Pandora pays royalties for every song played: membership and listening hours increases, royalty expenses increase at a linear rate. Until last year, Pandora was not yet profitable, the biggest concern of investors. But what’s worth considering is that Pandora seems to have addressed the biggest concern of investors – whether or not it can create a profitable business. And the business seems sustainable as the company expects to continue generating profits for the full-year 2014, despite expecting some loss in the first quarter.
While market valuation is certainly under doubt, Pandora’s transformation into profitable business is encouraging considering the losses it experienced in the past few years.
Slide 2 - royalty volatility
.Pandora is in a constant battle over royalty prices.
Threat: While internet radio royalty fees are expected to rise with time, increasing number of users and increasing listener hours will also require Pandora to pay more royalties in the per track fee agreement. Pandora maybe be unable to favorably renegotiate royalty rates with the Copyright Board. If this implies
Slide 1 and 2– Pandora Horizontal conflict
Pandora used to have its target on desktop usage. Now it is switching to mobile and cars, with mobile adds growing faster than any other form. (We are going to see the numbers later).
This happens to create an internal horizontal competition among its vehicle distribution channels and causes a necessity to invest resources in each of them at the same time.
Slide 3 – Pandora vertical conflicts
Pandora’s membership v.s. advertising sales
Pandora’s focus is to increase the advertising sales, especially in mobile devices, but at the same time it needs to grow the number of users. Right now Pandora is struggling to keep its membership rates increasing, and also has to face seasonal demand and competition threats.
Pandora Renata – Question 4
Slide 1 – Threats to success (with a graph)
Cost structure:
. Pandora pays royalties for every song played: membership and listening hours increases, royalty expenses increase at a linear rate. Until last year, Pandora was not yet profitable, the biggest concern of investors. But what’s worth considering is that Pandora seems to have addressed the biggest concern of investors – whether or not it can create a profitable business. And the business seems sustainable as the company expects to continue generating profits for the full-year 2014, despite expecting some loss in the first quarter.
While market valuation is certainly under doubt, Pandora’s transformation into profitable business is encouraging considering the losses it experienced in the past few years.
Slide 2 - royalty volatility
.Pandora is in a constant battle over royalty prices.
Threat: While internet radio royalty fees are expected to rise with time, increasing number of users and increasing listener hours will also require Pandora to pay more royalties in the per track fee agreement. Pandora maybe be unable to favorably renegotiate royalty rates with the Copyright Board. If this implies