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Will Pandora going public help the online music industry?

on March 21, 2011

Oakland-based Pandora, the popular internet radio program, has struggled financially since its inception in 2000. Although the concept was novel—using a unique algorithm to help listeners uncover new music, based on other bands they like—the company couldn’t attract much investment.

Additionally, the royalty fees Pandora was required to pay artists were enough to almost drown the company in debt, particularly with no dependable revenue source. Yet Pandora’s growing and dedicated fan base came to the rescue in 2008, helping convince Congress to back off on legislation that would have made Internet royalties too high for the company to survive.

On February 11, Pandora filed for its initial public offering, or IPO, and the influx of money will bolster the company’s position at the forefront of the booming online music industry. The IPO date has not yet been determined, but is slated for later this year. In this video we hear from a musician and an industry attorney on what Pandora’s success means for online music.

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Photo by Basil D Soufi
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