RAIN 7/13: Pandora raises $35 million more in VC funding
GREYLOCK PARTNERS LEADS PANDORA INVESTMENTPandora has raised $35 million in new venture capital funding, according to peHUB. A venture capital firm called Greylock Partners is leading the investment, according to Pandora, which also said Greylock partner David Sze would be joining Pandora’s board of directors. “Consistent with our past practice, the amount and valuation are not being disclosed,” Pandora said in a statement.
Pandora had previously raised $29 million, reports peHUB, from such investors as Crosslink Capital, DBL Investors, Hearst Corp., Labrador Ventures, Selby Venture Partners and WaldenVC.
Interestingly, peHUB notes that “the new financing was signed while Pandora’s very existence was in jeopardy,” that is, before the new “Pureplay” webcaster royalty deal was announced last week (RAIN coverage here). “I’ve got to assume that investors believed this revised royalty agreement was a done deal,” writes peHUB’s Dan Primack (here). “Although my best bet is that some sort of contingencies were attached to the $35 million (like if the royalty thing fell through, so did the financing). Otherwise, it would have been a hell of a risk to take.”
ROBERTSON: NEW ROYALTY DEAL DOOMS NET RADIO TO “SLOW DEATH”Tech entrepreneur Michael Robertson writes in a recent blog post that he doesn’t agree that the royalty deal for “Pureplay” webcasters announced last week is an end to the royalty crisis. “It’s true the new rates are lower,” he writes (here), “but they are nowhere close to allowing a viable web radio business…Webcasters were facing an immediate execution so instead, they agreed to bleed a slow death.”
Robertson (pictured) points out the deal’s stipulation that webcasters pay the greater of 25% of revenue or a per-performance rate, arguing that “there is no reasonable scenario in which the per song royalty will be lower than 25% of revenues, rendering the revenue share component moot.” He also argues that the royalty deal makes it “impossible” for Internet radio to compete with satellite or terrestrial radio, as those services have much lower royalty rates. All in all, Robertson writes, “These new rates are typical of the lopsided deals record labels have done with net companies in the past 10 years.”
NPR TRIES TO BALANCE DIGITAL FUTURE, DUTY TO LOCAL STATIONSNPR’s president and CEO Vivian Schiller looks forward to a digital future, but NPR’s duty to local stations offers her challenges. “My position is if the audience wants it, we need to give it to the audience,” she said in speaking to North County Times. “We need to provide an NPR experience in every way they want it, if they want it on their mobile phone or Blackberry or iPhone, no matter what it is.”
NPR’s affiliate stations worry, however, that if listeners can tune in to their favorite programs through mobile phones, they’ll bypass their local stations. Schiller argues that NPR’s future digital offerings will point listeners to their area stations with strong local content. “The relationship of NPR and the member stations is that we help each other,” she said. “Our survival and strength is dependent on our cooperation.” Read Schiller’s full interview with the North County Times here.
FORMER AM TALK SHOW HOST TO RELAUNCH PROGRAM ONLINELynn Cullen, a former talk radio personality with WTAE-AM, WPTT-AM and WAMO-AM in Pittsburgh is launching a new radio show online. The “Lynn Cullen Live” show will stream live from the Pittsburgh City Paper Web site (here) beginning August 18. Both Cullen and Chicago’s Steve Dahl — who will be creating a podcast show (RAIN coverage here) — were featured today in Tom Taylor’s daily newsletter as individuals “reinventing” themselves after terrestrial radio.
PORTABLE HD RADIO AVAILABLE FROM BEST BUYBest Buy began offering the first portable HD radio receiver in stores on Sunday. The Insignia device boasts a rechargeable battery, a color LCD screen and 10 programmable presets. It’s available for $50. For more, check out Radio Ink’s coverage here.
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