Pureplay Webcasters Making Waves

November 2, 2011


Two major pureplay Internet audio services have made headlines in as many weeks.

Kicking things off was CBS-owned Last.fm, after a declaration that it's scrapping an ad-support model for its smartphone app users in favor of an all-subscription model. Writing in his blog, Last.fm VP Matthew Hawn said that trying to perpetuate the service as an indirectly supported model simply isn't practical. Desktop listeners and those with smartphones running Windows 7 mobile OS will still maintain free access for the immediate future.

Like many Pureplay customizable stream services Last.fm has been hurt by high performance licensing costs and has reportedly been running in the red for some time. Its subscription service costs about $3 per month.

Still bigger print appeared last Friday as pureplay giant Pandora announced a pending $100 million IPO. Though specific details of the offering have yet to emerge, some observers believe that Pandora could be poised for profitability, as its registered user base has swollen to more than 80 million. Language in a prospectus contained in Pandora's SEC filing also hints that the company is looking to broaden its content repertoire to include sports, talk, news and other forms of content beyond music. Pandora's revenue model is currently tilted toward advertising, with less than a quarter coming from commercial-free subscriptions.

A number of financial publications believe that Pandora and other dot-coms are moving forward with IPOs now in order to cash in on a recent rally in stocks.



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