Pandora, the internet radio company, announced Feb. 11 that they plan to go public,
setting an initial public offering at $100 million in order to raise funds.
Pandora has grown gained enormous popularity since its beginnings in 2000, but
faces financial woes because of high royalty costs. According to the Oakland Tribune, the
company must pay royalties per minute per listener, which has become expensive now that
the number of registered users is 80 million.
Senior marketing and accounting major Melissa Hebbel said that this solution beats
the alternative of charging users to listen to music. “They lose ownership of their company,
but people like to use Pandora because it’s free,” she said.
Though they currently offer for sale an advertisement-free listening subscription,
Pandora’s basic listening will remain a free service.
“I wouldn’t pay for Pandora if they started charging to use it because they don’t
always get the music I want to listen to anyway,” said freshman general business major Joel
Krinsky.