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Why a New Paid Plan Won't Save Pandora

Pandora will retain data about the music Uber drivers listen to.
Photograph by Andrew Harrer — Bloomberg via Getty Images
By Jeff John Roberts
November 18, 2015

Poor Pandora. The popular music service is trying something new after a financial face-plant in October. But the plans are already falling flat, while Pandora’s larger problems are beyond its control.

The new gambit, which Pandora (P) announced on Monday, involves plans to buy Rdio, a failing online music service that competes with the likes of Spotify and Apple Music. The idea here is for Pandora to spend $75 million for Rdio’s assets in the hopes of expanding its paid subscription business.

This could mean more revenue. But, as some have pointed out, Pandora’s plans for Rdio are also part of an effort to make nice with the music industry by charging more people for music. An expanded subscription service could counter the industry’s claims that Pandora doesn’t pay enough for the songs it plays. It could also strengthen Pandora’s recent attempt to portray itself as more musician-friendly than rivals Spotify or YouTube.

So will the Rdio plan improve Pandora’s fortunes, which suffered a brutal stock collapse after its October earnings? Early signs aren’t encouraging: Investors shrugged at the news, leaving Pandora shares to fall back to recent lows. Analysts, meanwhile, said the plan “reeks of desperation” and doubted the company’s ability to execute.

This is no surprise since, in many ways, the fate of Pandora is mostly out of the hands of its executives. Instead, the company’s future is being dictated by a hostile music industry that has its foot on Pandora’s throat, and can determine if it will live or die. It is the industry that now controls Pandora’s core music costs and, by extension, what it can offer its customers. And unfortunately, what is good for the music industry is not necessarily good for Pandora, consumers or musicians.

As venture capitalist Chris Dixon explained in a thoughtful essay this week, music is unlike other forms of online media in that those who control most of it–the music labels–are largely indifferent to innovation or improving user experience. Dixon describes the video game industry’s burgeoning fan communities, and then writes:

“Contrast this to the music industry, which relies on litigation to aggressively stifle remixing and experimentation. Large music labels have effectively become law firms devoted to protecting their back catalog. Sometimes this means suing their peers, and sometimes this means suing communities of users.”

And this is Pandora’s dilemma in a nutshell. It is operating in an economic environment in which the most powerful players are more interested in extracting long-ago back rents than exploring new business models. It’s as if the video game industry decided to forsake most of its new game development in favor of maximizing revenue from legacy Pac-Man terminals.

Think this is an exaggeration? Consider the music industry’s recent legal campaign against Pandora and other digital services to demand new royalties for songs recorded prior to 1972. The justification for such royalties is dubious but, faced with an expensive state-by-state legal fight and appeal process, Pandora agreed to settle the claims for $90 million. This is no trifle for a company that is reporting a rapid rise in quarterly losses, including $150 million in Q3:

Meanwhile, none of the $90 million windfall Pandora is paying will go to support new artists. Instead, most of it will be divvied up among the usual cabal of lawyers and music labels who call the shots in the music industry. Worse, it’s unlikely the payout will quell the industry’s refrain that Pandora (even as it bleeds losses) is somehow paying too little in royalty payments.

For those familiar with music licensing, such arguments are nonsense. Pandora pays far more than traditional radio because, unlike AM/FM stations, digital companies must pay not only songwriters to play a song but they must also pay to perform the sound recording as well. This means that, even though Pandora can avail itself of a licensing system to pay songwriters, the industry has it over a barrel when it comes to demanding sound recording payments–which is why Pandora’s royalty rates are so high, and could climb higher still.

In this context, Pandora’s pledges about signing up more paid subscribers may simply amount to a peace offering to persuade the music labels to stop suing. Indeed, a source close to the company says relations between Pandora and the industry have “thawed” in recent months, and the sides are poised for more partnerships.

But even if this is true, how long until the record labels move the goal posts and demand still more from Pandora? Many in the music industry still regard it as a scapegoat for lost CD sales, and not as a promising new business model that offers a wealth of new data and marketing opportunities. It would be naive to think any current goodwill survive the next royalty fight.

All of this just sums up the large problem for Pandora and the music industry: The music royalty system, as it is currently configured, is broken and creates incentives for copyright owners to “become law firms devoted to protecting their back catalog” instead of helping to build a future industry. And until Congress takes action, we’re stuck with the status quo.

So, don’t expect Pandora’s plans for a subscription service to improve its fortunes when those who control the music business are rooting for the company to fail.

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For more on digital music, see this video about Spotify’s new hit:

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Flying in Pandaria, New Capital Cities, Male Pandaren Emotes, Blue Posts, Fan Art

Wisdom of the Four Winds
Once you reach level 90, which was unlocked in this patch, you are able to purchase Wisdom of the Four Winds from a flight trainer for 2,500 gold. This will allow you to use flying mounts in Pandaria!



Horde and Alliance Capital Cities in Pandaria
If you are looking for an easy place to purchase that flight training from, look no further than the new Alliance and Horde capital cities that are located in the Vale of Eternal Blossoms.











Male Pandaren Voice Emotes
The male Pandaren had a few new emotes added in this patch.



Blue Posts
Originally Posted by Blizzard Entertainment
Weather Effects
We just added weather to all the zones in the last build. If you are not seeing it yet, just give it some time to show up. (Blue Tracker / Official Forum)

Mage (Forums)
Mage PvP
The intent is that stronger player snares (such as Frost Bomb) should not overwrite weaker player snares (such as Frostbolt). Their effects won't stack, but the debuffs should persist.

Example: You Frostbolt a rabbit. It gets the Frostbolt debuff and is snared by 50%. You then Frost Bomb the rabbit (under the assumption that you are really scared of this rabbit for some reason). The rabbit gets the Frost Bomb debuff and is snared 70%. However, it doesn't lose the Frostbolt debuff and two seconds later when Frost Bomb wears off, it is now snared at 50%. (Blue Tracker / Official Forum)

Fan Art Update
The World of Warcraft Fan Art Section has been updated with three new pieces of fan artwork.

This article was originally published in forum thread: Flight in Pandaria, New Capital Cities, Male Pandaren Emotes, Blue Posts, Fan Art started by chaud View original post
Comments 97 Comments
  1. moveth's Avatar
    2.5k is about what I expected with the gold inflation. Not bad.
    • Reply
  1. Korrina's Avatar
    Oh wow the cities look great...
    • Reply
  1. Yuuki Asuna's Avatar
    I love Vale it's an amazing and beautiful zone =3 Probably one of my favorites of all of them ^^
    • Reply
  1. Honeyprime's Avatar
    Quote Originally Posted by moveth View Post
    2.5k is about what I expected with the gold inflation. Not bad.
    I did too. I hope it stays that way lol.
    • Reply
  1. Hitei's Avatar
    It should be noted, before people start complaining about Blizzard's laziness, that the two cities actually do have some artwork differences as well.
    • Reply
  1. Ryuji's Avatar
    That...the new capital to hang out in...it's beautiful. o_O
    • Reply
  1. Airwaves's Avatar
    Remind me not to let a panda laugh at me that sounds horrible.
    • Reply
  1. darkthunder's Avatar
    Quote Originally Posted by moveth View Post
    2.5k is about what I expected with the gold inflation. Not bad.
    While expected, it does get a bit tedious with all the "nickle-and-dime" stuff going on in EVERY expansion. TBC was easy: Reach 70, buy flying license. In every subsequent expansion, they do exactly the same thing. Next thing you'll know, they'll add a ground mount license for every expansion as well. I mean, "Cold Weather Flying" in Northrend, is an excuse because the flying mounts may not be capable of handling the cold weather otherwise. But then, shouldn't ground mount be subject to the same limitation in Northrend?

    On topic: The new "Faction Capitol" locations look real cool. Lots of cool artwork going into this expansion. While i'm not currently playing WoW, nor have any current intention of returning, Mists of Pandaria certainly looks tempting. Depends on when it's out, and how things goes for Guild Wars 2.
    • Reply
  1. chaud's Avatar
    Quote Originally Posted by Ryuji View Post
    That...the new capital to hang out in...it's beautiful. o_O
    Just give it a try in game with the music and sounds that go along with it. It is one of the nicer areas in this expansion.
    • Reply
  1. familiar's Avatar
    Nom nom nom
    • Reply
  1. Vongimi's Avatar
    Is level 90 coming in this patch or something? Figured it would come soon...
    • Reply
  1. Alopex Major's Avatar
    That nelf druid fanart is amazing, is there a larger size? It's all pixelly if I stretch it for my desktop
    • Reply
  1. Shawaam's Avatar
    That kiss-emote scares the shit out of me...
    • Reply
  1. Perdition's Avatar
    It'd be nice if they made it so you couldn't fly in pandaria at all. Bring world pvp back pls
    • Reply
  1. Myz's Avatar
    A bit small, but it makes up in the sheer amount of beautiful art work that went into the city. Gorgeous.
    • Reply
  1. Eleventh's Avatar
    What if Blizzard removed the titles from Sinestra, Al'Akir and Nefarian right now and the people with "of the Four Wind" title didn't have to pay for the training when they finally reach 90 (?). It's not a great amount of money but at least you'd get some acknowledgement for having killed Al'Akir before it got nerfed to the ground. :3
    • Reply
  1. grexly75's Avatar
    Quote Originally Posted by Vongimi View Post
    Is level 90 coming in this patch or something? Figured it would come soon...
    You you can go to level 90 just takes a bit as is 21,200.000 to go from 89 to 90..
    • Reply
  1. AncientNecro's Avatar
    Quote Originally Posted by Eleventh View Post
    What if Blizzard removed the titles from Sinestra, Al'Akir and Nefarian right now
    I'm fairly certain Blizzard has taken the stance of not removing content/rewards (i.e. Light of Dawn).

    Quote Originally Posted by Eleventh View Post
    and the people with "of the Four Wind" title didn't have to pay for the training when they finally reach 90 (?).
    This would actually be an interesting idea. Perhaps a chat option from the vendor?

    Quote Originally Posted by Eleventh View Post
    At least you'd get some acknowledgement for having killed Al'Akir before it got nerfed to the ground. :3
    Having the title during the current content as well as the date showing that you did it when it "mattered" should be enough.
    • Reply
  1. Alixie's Avatar
    Is that a roar, or a bear farting?
    • Reply
  1. Eleventh's Avatar
    Quote Originally Posted by AncientNecro View Post
    I'm fairly certain Blizzard has taken the stance of not removing content/rewards (i.e. Light of Dawn).

    This would actually be an interesting idea. Perhaps a chat option from the vendor?

    Having the title during the current content as well as the date showing that you did it when it "mattered" should be enough.
    Hmm, good point. I guess I'm one of those elitist players who think that titles should matter, because they are some sort of honorifics, if you ask me. On the other hand, having "of the Four Wind" as a way to bypass the 2,500 gold fee, more people would feel inclined to revisit old content and experience something they haven't done before - even though it's not very relevant when you are level 90. I think Blizzard is all for revisiting old content.
    • Reply

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