Music streaming service Pandora has taken heat as of late despite being one of the most downloaded apps on most mobile platforms. The problem is that as time goes on, investors are becoming increasingly skittish regarding Pandora’s ad revenue. At present, the company is not expected to turn an annual profit until 2014. As a result, Pandora’s stock price has tumbled 16 percent in recent months.
Pandora has 23 million active users, but the problem is the ad model in use. Pandora is attempting to blend short audio clips, sidebar ads, and videos into an unholy conglomeration of consumerism. Companies just aren’t used to running campaigns like that. It also doesn’t help that Pandora lacks ad sales staff in many large markets in the US.
Pandora’s recent decision to lift the 40 hour listening cap could pay off, with a projected gain of $53 million over the next four years. The company is also investigating integrating the service into cars, which would allow it to steal come revenue away from terrestrial and satellite radio.