Sirius XM Shows Us How to Create Float

Pandora has effectively been buying likability by giving a fairly expensive product that it pays for—music—away for free. As I pointed out earlier, The New York Times reported that Pandora paid $446 million in music royalties in 2014.

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Will Pandora Ever Make Money?

No company seems to exemplify the central problem facing digital entertainment media better than Pandora Media (NYSE: P). The music service attracts vast numbers of followers (250 million registered users and 81.5 million active listeners in 2014, according to Expanded Ramblings), yet the charts show that it cannot seem to make money.

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Pandora Execs Cash Out

These figures call Pandora’s whole business plan of distributing streaming music online into question. The company cannot make money, even though it has around 70 million regular users. One reason why it isn’t making any money is that Pandora has no way of charging those users for its service. Pandora’s business model basically consists of paying for music and distributing it for free.

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