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Pandora's Business Model: Is It Sustainable?

Subscribers read this analysis of Pandora's business model (in full below) when it first published last week via Billboard's print, online and iPad platforms. And you could have too if you subscribed to Billboard with our unmatched music industry coverage. Each week Billboard features up-to-the-minute news, features and in-depth analysis as well as insights from industry experts and top executives, music features examining artists' varied paths to success and, of course, our world-renowned charts — a global barometer of music success.

You also can pick-up this special issue of Billboard, which includes the Publisher's Quarterly, an exclusive report on Google Play and Verizon's negotiations, the Hot 100's anniversary and Phil Ramone's last album here.

Two questions are consistently asked of Pandora’s business model: Can it sell more advertisements, and will it generate more revenue? The music industry sees a company that has placed market share ahead of revenue growth. People often wonder if Pandora could put more emphasis on growing revenue as it seeks lower royalties.

The short answer to both questions is yes, Pandora will sell more ads and generate more revenue. Although its business model has been widely criticized, the Oakland, Calif.-based company is well-positioned to turn its massive listening audience into profits.

The U.S. radio market is immense. Broadcast radio advertising totaled $14.2 billion in 2012, according to the Radio Advertising Bureau. About 242 million Americans listen to radio every week, according to Arbitron. Listenership is heavy across age groups: 90.9% of 12- to 17-year-olds, 90.8% of 18- to 24-year-olds and 94.5% of 25- to 54-year-olds. But only a handful of eventual Internet radio winners will be rewarded handsomely for their efforts.

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The model of the music business has changed

by Infiniteduff

But that doesn't mean less good music is being made. The internet and ProTools are making record companies less necessary. If anything this is giving more musicians an opportunity to be heard. It is certainnly making radio less relevant. When I was a kid in the 80's the only way we could get new music was through the radio. Now I can go online and find my own new bands. And new bands can do their own recording, promotion and distribution.
The mainstream will always exist and it will always be tailored to appease the most people. Most music fans are content to turn on the radio and hear the same songs over and over again

Newspapers are only the start. Cable-TV and AM/

by Dead-bug

/FM radio are next. Rush and Hannity are dumping their AM/FM radio contracts when they expire. They are going to Internet Streaming following Glenn Beck's example. Everyone Streams everything to their Smart Phones, Tablets, Smart-TV's and Internet Streaming devices. Glenn Beck's income stream is up 500% over what was possible using FCC limited AM/FM radio stations and their limited reach. Cable-TV is a failing business model in the process of imploding. They are still attempting to force Cable-TV systems to carry their programming and extorting ever increasing payments from them. People are sick of their Cable-TV bills being so high and rising every few months while at the same time the quality of the programming declines

China expects special courts on intellectual property  — Global Times
Many of these cases were extremely complicated of foreign entities, cutting-edge technical issues, new business models on the Internet, or world renowned brands, said Jin Kesheng, deputy chief judge of the IPR tribunal of the Supreme Court.

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