Pandora loses its mind!

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.

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!