Plagued by costly music rights fees, online radio service Pandora looked beyond music in their multi million dollar IPO filing this week. The online service, based on the Music Genome Project, hopes to expand to sports and talk shows to diversify traffic and build a succesful long term business for ad sales. In addition, Pandora is looking to expand into the rapidly growing smart car niche, as well as other online devices beyond iPhone and Android smartphones.
Expand Content Formats. Although music format stations represent 80% of total radio share according to Arbitron, a media and marketing research firm, many radio listeners are drawn to sports, talk, news and other forms of content beyond music. We think there is an opportunity over the long term to offer these types of content in addition to music.
Pandora’s offering also says that such diversification is what gives terrestrial radio an edge over it’s commercial free online service. But when will we see a Rush Limbaugh or Howard Stern channel? It’s unclear how a service, which creates a very personal music station for individual users, would be able to mimmick the same business model for talk shows and sports, but if they could pull it off, it could mean a boon to talk radio and sports talk fans who wish to focus listening to their favorite teams or political philosophies.
[via New York Times]