Pandora, the Internet radio station that helped stoke the flames of the streaming revolution, is said to be in talks to be sold, according to The New York Times.
Speaking with unnamed sources “briefed on the talks,” the Times reports that the company is looking to shop its streaming catalog — and its tens of millions of users — to potential buyers with help from investment company Morgan Stanley. The talks are said to be in early stages and may not lead to an ultimate deal.
The news comes after something of a downward spiral for the Web streamer, which still boasts the largest user base in the business at 78.1 million users. However, that user base has been dwindling as of late as Pandora is flanked on all sides by rising foes in Spotify, Google Play, Amazon Music, and upstart Apple Music, all of which offer something Pandora doesn’t — on-demand streaming. With the ability to pick and choose from tens of millions of tracks, Spotify and Apple’s Beats-based Apple Music, along with the other players, have increasingly encroached on Pandora’s position at the top of the streaming world.
When Pandora first hit the Web back in 2000, its revolutionary Music Genome technology — the brains behind the service’s thumbs up/thumbs down form of predicting musical preferences — changed the way people thought about radio, and about listening to music itself. That helped the company garner over 80 million users sourced from just three countries; New Zealand, Australia, and the U.S., and allowed it to become the face of streaming music long before Spotify started wheeling and dealing with music labels in the middle of the decade.
But a series of setbacks in the midst of heavy competition has begun to hobble the streamer in the already profit-bare streaming marketplace. Following a downward trajectory in its user base, Pandora reported a loss of $85.9 million in the third quarter of 2015, and its earnings from the fourth quarter of last year are expected to show the company’s slowest growth ever, according to the Times.
And though a recent decision by the copyright royalty board wasn’t as bad as expected — it was thought the board could raise the price Pandora pays in royalties from .14 cents per song to .25 cents — the 20 percent price hike that was handed down didn’t affect the service’s on-demand streaming competition.
The company is currently carrying a market value of just $1.8 billion, according to the report, down from around $7 billion just two years ago, which makes the potential sale seem all the more curious, if not desperate. That said, these talks are reportedly in their nascent stages, so we’ll have to wait and see if anything comes from it.
Pandora’s recent slide isn’t for lack of trying. The company has made some bold moves to spur revenue and bring in a broader user base in recent months, including purchasing all the assets from bankrupt on-demand streamer Rdio as well as throwing down $450 million for TicketFly to better integrate ticket and concert notifications. Last year Pandora also launched an artist marketing platform in another attempt to dig deeper into live music promotion.
The company even came up with a marketing stunt in March of last year to spur its still-paltry number of paid, ad-free listeners (which sits around 3-4 million), offering its broader user base 24 hours of ad-free listening for a dollar. The Times also reports that Pandora is hoping to launch in more countries to better compete with other more globally-recognized streaming brands. For now, however, the service appears to be looking for options of a different kind.
We’ll update this story as the news develops.