![]() ![]() Pandora, like most other “freemium” Internet businesses, is struggling to monetize by not being able to convert adequate amounts of free users to subscribers, and face challenges from the increase in cheaper mobile advertising. 1 Despite Pandora’s strong brand name in the United States, it is increasingly vulnerable as several other online music competitors are entering the market. As of July 31, 2012, Pandora had 150 million registered users, 54.9 of them active listeners. Pandora’s impressive $101 million revenue is mainly derived from advertising and paying subscribers, but due to expensive music royalty rules, Pandora is struggling to be profitable. Since initiation, stock price has been extremely volatile and steadily declined (see appendices 3). The service relied on users spreading the word themselves.Pandora went public in July 2011.
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