This post was originally published on Adva’s Tumblr page, Haikusic.
Pandora, the online streaming radio, bought Ticketfly, an event ticketing company, last Wednesday for $450 million. Of this, $225 million was paid in cash and the rest in stock. The goal of the acquisition was to provide more capital for the company by following Spotify’s model of advertising ticket sales of artists to consistent listeners. How has it been working out for them so far?
Pandora stock is at an ALL TIME LOW, with absolutely NO sign of increasing any time soon. Wedbush analyst Michael Patcher thinks the purchase was exceedingly expensive. “We see little value added for Pandora beyond promoting artists, and note that Pandora has limited experience or aptitude in promoting or hosting concerts,” Patcher told Digital Music News.
So if Pandora’s real value lies in promoting artists, how’s that going?
Meet Kevin Kadish, or Kadish for short. You might not know him by name, but you’ve sung along to his music.
He produced “All About That Bass” for Meghan Trainor. The pop tune spent EIGHT WEEKS at No. 1 on the Billboard Hot 100, was #1 in 78 countries, became the second-biggest selling song of 2014 in Australia, and the eighth-biggest selling song in Germany and the United Kingdom the same year. You would think that he would have bought Richie Rich’s house by now, right?
On September 22nd, just over two weeks before the acquisition, Kadish told members of Congress that Pandora paid him $5,679 for 178 MILLION plays. In his plea to Congress, Kadish begged for a reform. There were over 20 stakeholders from the music industry in attendance including representatives from the creative, publishing, recording, broadcasting and hospitality industries. Also present were Representatives Darrell Issa (R-CA), Blake Farenthold (R-TX), Doug Collins (R-GA) and Marsha Blackburn (R-TN).
One would hope that stronger enforcement of the Songwriter Equity Act will stop companies like Pandora from paying artists pennies while using millions of dollars to buy companies they don’t need.