Pandora Sold to SiriusXM for $3.5 Billion
Music listeners of a certain age have a soft spot for Pandora, the company that brought music streaming into the mainstream in the ’00s with a predictive, algorithmic engine that recommended music you’d like based on your selections. Pandora was the go-to music streaming app of choice, the default for background music at parties, bars and pretty much everywhere.
Unfortunately for Pandora, it became obsolete the minute Spotify launched in the U.S. in 2011 (and elsewhere in the world before that). Why let an algorithm pick music when you can listen to anything you want from basically the entire history of recorded music at any moment? While Pandora was initially able to hang on with the less decisive set of listeners by pushing its playlisting algorithms, Spotify eventually caught up to the curve and now has robust recommendation offerings. I haven’t touched my Pandora subscription since the moment I signed up for a premium account on Spotify (the very first day of its availability!) and I don’t know anyone who still uses it. I’ve barely even heard the word “Pandora” mentioned of late. I figured the company had been scuttled to the side bin of internet innovators who got passed by, right next to Friendster and Clickradio.
Why the fuck would anyone agree to pay $3.5 billion for it, then? Especially, as CNN reports, when the company is hemorrhaging money? ($221 million in the first half of 2018 alone!)
I’d have to imagine the thinking goes something along these lines: SiriusXM, who bought Pandora, figure they can leverage their strong foothold in the automotive sector by shoe-horning Pandora into America’s cars. Offer Pandora as part of the package that comes along with every SiriusXM subscription — which is standard in many automobiles — and there’s plenty of money to be made, both via new subscriptions and advertising. Pandora could complement SiriusXM’s radio selections by offering listeners a more customizable model on the fly, when driving and tinkering with Spotify at the same time is both impractical and dangerous.
Still, this one’s a bit of a head-scratcher. Lots of folks thought they could revive MySpace, and it still hasn’t happened — there was a time and a place for it, and that’s long since passed. I’m sure the big wigs in charge of this transaction have done plenty of financial analysis, though, so we’ll have to wait and see how it all goes. I’m genuinely curious.