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Music Industry News Roundup #5

Music Industry News Roundup Here’s the music industry news roundup from the last week. There’s much more diverse news than previous weeks, but streaming continues to dominate the conversation.

Taylor Swift is the highest earning celebrity. The thing is, she didn’t get that way from selling music. She learned early that it’s the brand that sells.

Elizabeth Warren has it in for music monopolies. She has her eye keenly on Apple, Google and Amazon. This is not the person to have angry with you, regardless how large the enterprise.

Spotify’s trying some hosted radio shows. It seems like Apple Music’s Beats 1 is making an impact, so Spotify’s trying something similar, but without the big name DJs.

Spotify looks to go public this year. In related news, 5 sources have stated that the company will file an IPO soon. I bet the investors are happy at the prospect of getting some money back, but what will the market say?

Sirius XM subscribers pass 30 million. Everyone thought that the satellite business was dying, but that’s not the case at all. You know what? It’s all about the programming (something that terrestrial radio should learn).

Pandora is teetering. The major shareholders aren’t happy and they’ve brought in a high-powered consultant to explore a sale.

Artists not seeing much from secondary ticketing. Not much of the money made by Stubhub, Viagogo or Ticketmaster seems to be making its way back into the pocketbooks of the artists. Isn’t this a bigger issue than YouTube royalty rates?

Selena Gomez social media posts are worth $550,000 a piece. Astonishing but apparently true, Ms Gomez ranks #1 with sponsors who are willing to pay to be included in her posts.

Nielsen’s mid-year charts. Drake, Adele, Rhianna dominate. No surprises here except for Bowie’s Blackstar being the #1 vinyl album so far (but with only 57,000 copies sold). Sales are still falling, with Adele’s 25 leading the pack with only 1.4 million in sales.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

Pandora’s Largest Investor Worried About Its Future

pandora-internet-radiopandora-internet-radioPandora’s largest investor is so concerned about its future that it sent a letter to the company’s CEO and board members asking them to reconsider its strategy and explore the possibility of a sale. According to a report in Music Business WorldwideCorvex Management LP, the investor that sent the letter, owns  8.3% of Pandora and is fed up with seeing the company’s share price slide.

Among the concerns expressed in the letter include:

  • Pandora is “pursuing a costly and uncertain business plan, without a thorough evaluation of all shareholder value-maximizing alternatives.”
  • Questionable capital allocation decisions” which may refer to the $450m purchase for Ticketfly last year.
  • The fact that senior management has sold off most of its stock, which certainly doesn’t give an investor confidence in the company’s future.
  • The fact that the company replaced former CEO Brian McAndrews with founder Tim Westergren, a move panned by many in the industry
  • Concern over Pandora’s direct deals with rights-holders, which were very costly.
  • and finally, Pandora’s poor stock price, which seems to have little hope of increasing.

Pandora is reportedly gearing up to transition to an on-demand service like Spotify, since in its current non-interactive state the company is not able to expand to other territories. It’s now available only in the United States, Australia and New Zealand, but other countries have blocked entry because of local rights issues which have proved too costly for the company to overcome. Turning into an on-demand streaming service would allow Pandora to expand, since most of the required record label licenses would be world-wide and wouldn’t depend upon local broadcast regulations.

Pandora labels itself as “Internet Radio,” a term which, while accurate, is very limiting. In September of 2015 the company purchased many of the assets of the Rdio music streaming service out of bankruptcy, providing it with much of the infrastructure for the change in the platform. The licenses from the major labels (the difficult part) were not included, however.

The call for a sale by its largest investor may cause others to jump on board, which could mean a fire-sale for the company, and one more income source for artists will die.