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Pandora Files To Go Public

techcrunch.com

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Re: Pandora Files To Go Public

#11

Post by adamt »

zacharycohn wrote: post #3

I don't know much about the market/strategy behind IPOs. Is it a good idea to IPO if you just lost ~$325k? I assume they have intelligent reasons behind the IPO - can someone explain the rationale?

The article states they lost $328k on revenues of $90M for the first 9 months of the year. The $328k loss is not really material (either as a proportion of revenue, or absolutely versus the size of the business) they are essentially breaking even. If you look at the numbers (image in the article) The $328k loss also includes some exceptional charges, they made an operating profit of $1.15M in the period.

Their revenues in the same 9 months of last year were $31m, so they have tripled their revenues year on year. Over the same period their costs less than doubled.

If one were to extrapolate this growth rate forward by just one year (a bit crude, but makes a point), they'd end up with $270m revenue, on $170m costs so $100m profit.

They are now breaking even - which is a simple metric of a sane business/proven model, doing significant revenue and growing very quickly. So now they are in an attractive state for the markets.

In terms of strategy, Techcrunch shows their first VC round was back in 2000, with significant further rounds in 2004 and 2005. One could safely assuming the overriding factor is that VCs will be looking for an exit.

An IPO will also provide the company with significant injection of operating cash, along with liquid paper (stock) with which they can use in further acquisitions

Re: Pandora Files To Go Public

#12

Post by johnwatson11218 »

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid.

It is my understanding that they have hired musicians to listen to each of the songs they stream then rate each one according to dozens of factors. The factors include things like "acoustic guitar", "strong melody", "high studio production values", "gritty vocals", etc etc. Then they are able to do some kind of cluster analysis on that dataset. So that if you put in "Stone Roses" you hear music from that band but then others that have a similar sound.

I find about 2 or 3 new bands that I really like every week. I have actually started buying CDs again.

Re: Pandora Files To Go Public

#13

Post by sp332 »

johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

They actually train their people in music theory, because they pull the music apart and list a few hundred features. Depending on the genre, there are different lists of musical features that might differentiate the songs.

This is what makes Pandora unique from Last.fm, or Ping, or other "social" music discovery sites. Instead of recommending songs according who likes them, it learns what kind of music you like. It looks across genres and artists to the actual musical features of each song.

Re: Pandora Files To Go Public

#14

Post by jdavid »

I think Pandora will go back into heavy losses if they raise money. I love Pandora as a service, but it's a far cry from being a Netflix. ( a long time paying customer of both )

Pandora's revenue is threatened by so much, RIAA contracts, pirating, advertisings race to zero ( via google ), etc...

They know this, and they will need to reinvent themselves to be worth anything. As a result I predict they will blow the 100 million on radically new business methods. Considering the success rate of music companies... I am worried.

Re: Pandora Files To Go Public

#15

Post by johnwatson11218 »

sp332 wrote: post #13
johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

They actually train their people in music theory, because they pull the music apart and list a few hundred features. Depending on the genre, there are different lists of musical features that might differentiate the songs. This is what makes Pandora unique from Last.fm, or Ping, or other "social" music discovery sites. Instead of recommending songs according who likes them, it learns what kind of music you like. It l…

OK, that is good to know. I had talked to somebody about this problem several years ago and I had thought that you could start with some kind of metric space and see which songs were 'close' to each other. The guy I was talking to seemed to view the problem as a kind of Bayes Theorem problem. The example being that if you had some obscure Beatles album then you most likely had 'Abbey Road' but the inverse probably wasn't true and that is where a software service could step in ... to recommend the obscure album as one you would probably like.

One thing that I really like about the service is finding artists that seem to lead to lots of other great songs. It isn't always who I think it is. For example on a lark I put in "New Radicals" because I liked one of their songs and I was so impressed with how well that defined a particular sound. When I put in big names like the Beatles or Rolling Stones I don't think I left those stations defined for very long. I wonder is there is some kind of structure to the what Pandora has calculated that could show which bands or songs seem to be most influential.

Re: Pandora Files To Go Public

#16

Post by yesimahuman »

johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

I agree that it has a nice station feature, but I've almost completely switched to mog. For about the same price I can listen to whatever I want whenever I want and as many times in a row as I want. Their radio feature is decent as well and for only a few more bucks a month it seems a much better value. Of course pandora has a huge advertising factor that could bring in good revenue for them to make it worth the investment.

Re: Pandora Files To Go Public

#17

Post by Qz »

johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

I feel like they could make a crapload of money if they sold/licensed their music selection technology/music information database. It would make their own streaming radio mostly irrelevant though.

Re: Pandora Files To Go Public

#18

Post by aaronblohowiak »

jdavid wrote: post #14

I think Pandora will go back into heavy losses if they raise money. I love Pandora as a service, but it's a far cry from being a Netflix. ( a long time paying customer of both ) Pandora's revenue is threatened by so much, RIAA contracts, pirating, advertisings race to zero ( via google ), etc... They know this, and they will need to reinvent themselves to be worth anything. As a result I predict they will blow the 10…

I hope they spend it on advertising. Their product rocks, i think they just need wider exposure. They also claim exclusive providence to being able to authentically post jobs in the bay area looking for "rock stars" to help out their company ;)

Re: Pandora Files To Go Public

#19

Post by Qz »

yesimahuman wrote: post #16
johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

I agree that it has a nice station feature, but I've almost completely switched to mog. For about the same price I can listen to whatever I want whenever I want and as many times in a row as I want. Their radio feature is decent as well and for only a few more bucks a month it seems a much better value. Of course pandora has a huge advertising factor that could bring in good revenue for them to make it worth the inve…

I stay with Pandora precisely because I can't listen to whatever I want, whenever I want, as many times in a row as I want. That's a whole lot of deciding and deciding takes time and effort. Pandora knows the music I like and is amazing at finding new music that I will like, without any time or effort on my part. All I have to do is turn it on. I have farmed out my music selection responsibility to them and I couldn't be happier about it.

P.S. My friends are always complementing me on how awesome my music is. I try not to take too much credit for it.

Re: Pandora Files To Go Public

#20

Post by JMiao »

Qz wrote: post #17
johnwatson11218 wrote: post #12

I think Pandora is a good company to buy because they have superior technology. I pay the $30 or so for the annual subscription to get unlimited listening and no ads. I have tried other services like this but I always come back to Pandora. I have read several articles that talk about the techniques they use to define a "station" and I think it is pretty solid. It is my understanding that they have hired musicians to…

I feel like they could make a crapload of money if they sold/licensed their music selection technology/music information database. It would make their own streaming radio mostly irrelevant though.

this was the original purpose of pandora, back when it was known as "savage beast."
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