Pandora: These Numbers May Surprise You

In 2009, online music service Pandora had revenues of $50 million, but paid royalty obligations to SoundExchange alone (a cost that does not include publishing) topped $28 million. The bigger Pandora gets, the bigger its royalty bill, a variable cost structure that makes it difficult for many content-based business to scale. Either way, Pandora is a serious chunk of total SoundExchange royalty revenues from online radio. Despite all of the wrangling over non-interactive royalties on recordings, Pandora now accounts for roughly 44-45 percent of total SoundExchange royalties for non-interactive streams "We're about 44 percent of Internet radio," says Pandora's Tim Westergren.