Top executives at Pandora have reached out with a couple of proposals for their counterparts at the record labels said sources, who asked not to be identified discussing private information. In addition to asking for direct investments from the labels, Pandora has sought to renegotiate licensing deals to reduce its costs, they said. The labels are unlikely to accede to the requests, the people said.
Pandora isn’t about to run out of money. It generates a significant amount of cash thanks to its online radio service, which has 81 million customers. Yet Pandora is under a tremendous amount of pressure to prove to shareholders, in particular activist investor Corvex Management, that better days are ahead. Pandora declined to comment, and Corvex didn’t immediately respond to a request for comment outside normal business hours.
Pandora has been losing users and suffering from a slowdown in advertising growth as paid services from Spotify and Apple, as well as free options like YouTube, have siphoned away customers.
Pandora shares fell as much as 4.8 percent to $11.41. The stock, which is down from an October peak of $14.77, was still up 35 percent from a year earlier as of Thursday’s close.
The company lost $345 million last year, more than double its losses from the year before. Pandora had to pay for the music rights it needed to offer an on-demand service, and then spent additional money to develop the technology for that service and market it.
Pandora has been pushing for help from its main partners while simultaneously postponing the deadline for proxy filings, which shareholders could use to propose changes to the company’s board.