Friday, October 23, 2015
Pandora Loss Widens, Shares Plunge
The company said on Thursday it agreed to a $90 million settlement with a coalition of record companies for use of their recordings created before 1972.
Pandora said it recorded $57.9 million of the total settlement fee in the third quarter ended Sept.30.
The settlement follows satellite-radio company Sirius XM Holdings Inc's $210 million settlement in June with the same coalition.
The coalition includes ABKCO Music & Records, Capitol Records, Sony Music Entertainment, UMG Recordings and Warner Music Group.
It ends part of a long-running battle between the music industry and broadcasters over the right to play songs recorded before Feb. 15, 1972.
“Pandora is excited to have found resolution with these record labels,” said Brian McAndrews, Chief Executive Officer at Pandora.
“Together we share a common objective to grow the music industry and support artists. We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels.”
“Major settlements with SiriusXM and now Pandora means that an iconic generation of artists and the labels that supported them will be paid for the use of their creative works,” said Recording Industry Association of America (RIAA) Chairman & CEO Cary Sherman.
“That is a significant milestone and a big win for the music community.
Pandora forecast fourth-quarter revenue of $325 million-$330 million. Analyst on average were expecting $351.8 million, according to Thomson Reuters I/B/E/S.
Pandora's net loss widened to $85.9 million, or 40 cents per share, in the quarter, from $2 million, or 1 cent per share, a year earlier.
Revenue rose to $311.6 million from $239.6 million, but this was far short of the average analyst estimate of $313 million.
Pandora's shares were down 20.5 percent at $15.25 in after-market trading.
Up to Thursday's close, stock had risen 7.6 percent this year.
Posted 4:18:00 AM