Salamu
We all know that there are a bunch of greedy people in the
world. Trust me, I just finished working for one such company. Six days a week
with no medical aid, no parking and a manager who felt as if he had to put his
small man syndrome on display all day every day.Safe to say it was a hard
environment to cope in.
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| Shock and horror as Pandora asks artists to take a 85% knock! |
One of the things which make people greedy is operating in
an industry which is becoming increasingly popular. It also helps if you have a
certain influence on the industry (ie: a dominant position). Pandora recently
found itself in such a position and is currently on a mission to get all music
artists to take a 85% cut in royalties.
I’m sorry….let me just reiterate what I just said because it
does sound like complete and utter madness.
Pandora wants musical artists who
supply music to it to take a 85% cut in royalties.
This is like a strip club owner expecting his dancers to pay
him to dance at his joint. There is no way that customers are going there for
the food or drink. They are going there for booty. This is what Pandora needs
to realize….without music artists you are NOTHING! Why then would you want to bite the hand that
feeds you? Because the public is definitely not coming to your site to admire
your coding!
The most likely explanation is that Pandora is starting to
feel the pressures of increased activity in the sector which is making them
uneasy. And an uneasy company tends to make stupid decision. Pandora is joined
in the industry by Spotify, Apple who recently launched their iRadio service
and YouTube who have announced that they will be launching specialized channels
on a subscription basis.
Before the entry of Apple and YouTube, there were only two
players in the market. Consumers were therefore desperately looking for variety,
but could not go anywhere. Because of this, Pandora felt relatively safe with
their business model as cashflow was not a problem. The introduction of
competition gave the public options and Pandora has probably found that a few
of its previously loyal customers are not so loyal anymore. So the reason that
Pandora is so keen on decreasing its royalties is that it is struggling for
cash.
However, to say that royalties is the be all and end all of
your monetisation policy is a bit of a farfetched scenario. There are other
ways in which Pandora can make its money:
- - Decrease your subscription costs. Please LOVE discounts
and by dropping your subscription base, you may just attract some customers
back to your forum.
- - Offer a new service. The public likes a new
service which is the main reason why Apple and YouTube has seen the early
success that they have on the subscription side.
- - Offer incentives which will see new artists
flock to your platform. A change is as good as a holiday.
It seems as if Pandora has lost their damn minds. And this
is not the way in which to approach the challenge of decreasing revenue.
Mei jua daima kuwa kabla yenu, na vivuli nyuma yako!
