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MBW ON PANDORA: WHAT'S NEXT?

According to Music Business Worldwide, Pandora has lost $1 billion in less than four years. The site quotes the company's 2014 valuation of $8b, as well as the reported (and reportedly rejected) SiriusXM bid from last summer of $3.4b/$15 per share for the digital giant. These numbers are placed alongside the current $4.90 share price ($1.2b market cap).  

MBW also notes a drop in monthly listeners to 73.7m, down from a 2014 peak of 81.5m (and 81m as recently as Q4 2016), as well as a marked decline in ad revenue. Net losses for 2017 are likely headed toward $500m.

The upbeat note amid these numbers, the site reports is subscriber growth, and the company's investment in that service also accounts for big expenditures that are likely a big near-term drag on the bottom line. (Especially content payments to rights holders, which are far steeper in the on-demand world.)

How will owners Liberty Media address the situation? As MBW notes, Chairman Greg Maffei and CEO Roger Lynch are shrewd operators, and the Liberty team likely has a plan to address the downturn. MBW suggests a sale is all but inevitable. Does their strategy involve expanding content offerings to attract more listeners? Stay tuned.

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