It was just about a year and a half ago now that we were hearing the bells toll for Internet radio service Pandora, but, as evidenced in today’s New York Times profile of the decade old stalwart, the service seems to be going nowhere but up.
While Pandora “has been on the verge of death, struggling to find investors and battling record labels over royalties,” according to the Times’ profile, a recent move by Warner Music may help to put one Internet radio station above the rest.
The Times’ profile tracks the full life and times of one of our favorite Internet radio stations, describing the many reasons Pandora experienced its first profitable quarter in 2009 and looks to become even more profitable. But it might have missed out on one reason – Pandora will have the music that other free players won’t.
As Tom Conrad, CTO for Pandora, told us last month when Warner announced it would pull all of its licensed content from streaming music services, “Pandora operates under a different licensing structure and won’t be impacted by Warner’s apparent decision with respect to free, on-demand services.” This could be huge in keeping Pandora on track to break $100 million in revenue this year, as predicted by William Blair, a digital media analyst, in the Times article.
The Times compares Pandora with other services, such as Slacker Radio, noting that Pandora has one third as many songs but three times as many listeners. We can’t help but wonder if the absence of Warner’s discography might further imbalance this scenario in Pandora’s favor.
Update: Slacker Radio has informed us that they too will carry Warner Music titles. This is from a note from a member of Slacker Radio’s PR team:
Slacker has and has had since day 1 voluntary licenses with all major labels and 100’s of Indie labels. Slacker negotiated deals and then built a business around those rates. We have good relationships with Warner and voluntary licenses with them. We do offer and will continue to offer music from Warner.
According to last month’s article in the BBC, however, services like Spotify and Last.fm could be in trouble of losing a large portion of their music library.
While the sheer number of songs is obviously not the deciding factor here, it could be a big one. With control over artists from Frank Sinatra to the Bee Gees to Puff Daddy, Warner’s music catalog could be the distinction between life or death for any online streaming music service. And now, with deals with automakers and consumer electronic manufacturers, it looks like Pandora is here to stay.
And as the Times points out, with last month’s hiring of CFO Steve Cakebread, the company looks poised to go public in 2010. In the meantime, we wonder what will come of the competition when Warner music officially pulls the plug and leaves them without a “Stairway to Heaven”.
