Pandora Perdeu 250 Milhões Este Ano - Irá Trocar O Modelo De Negócios Para Salva--la?

Pandora Has Lost $250 Million This Year -- Will Switching Business Models Save It?

HOUSTON, TX – OCTOBER 18: Singer-songwriter Yuna performs onstage during the Life at Pandora Gallery on October 18, 2016 in Houston, Texas. (Photo by Rick Kern/Getty Images for Pandora)

While it is still one of the biggest and most influential players in the streaming music industry, not everything is looking up for Pandora, which has been losing huge sums of money all year. According to financial documents just recently filed, the company’s third quarter had some positives and negatives, but it’s by adding up the figures from the first half of 2016 that the real scope of the monetary problem becomes clear.

In its third quarter, Pandora posted a loss of $61 million. Adding that number to the amount lost in the first two quarters of the year brings Pandora’s total losses so far this year to a hefty $253 million, which isn’t safe ground for any business to stand on. With three months to go, its total losses in 2016 could hit the $300 million mark.

There are several factors hurting the company’s bottom line, but it seems like one of the biggest financial burdens for the internet radio behemoth could also wind up being one of its biggest and most important revenue sources soon enough. The company’s CEO, Tim Westergren, admitted to investors while sharing the numbers that part of the reason why losses were so high this time around was because Pandora had to pay advances to content owners for licenses that would allow the company to launch its new streaming tiers with some on-demand-leaning features, which were revealed last month. 

It’s believable that paying for those licenses did hurt Pandora’s financial standing in the past quarter, and that depending on the deals, that could be the case for a time to come, but that doesn’t explain the past few quarters of losses, and it’s an explanation that will only work for so long. Adding on-demand functionality clearly comes with a sizeable cost upfront, but it isn’t the only issue the company faces, and Pandora will need to find money elsewhere if it wants to balance the books.

It certainly hurt the Oakland, CA-based radio giant’s wallet to pay for everything necessary to become something of a “new entrant” to the on-demand streaming market, but it could come with huge payoffs, and it might be just the thing to slow down all of these unfortunate losses. With its newly updated and recently announced Pandora Plus tier, the company is much closer to competing directly with massively popular options like Spotify and Apple Music, which are growing at faster rates when looking at user numbers.

It might be priced at only $5 per month (at least that’s the most attractive option), but if Pandora can convince even just some of its 77.9 million users (down from 78.1 million during the same period last year) to switch to this paid tier, while also recruiting new members, the big bill the company just paid, and which it will continue to pay, could wind up being a solid choice, and there’s a chance that the future is a bright one for Pandora.