Problems at Pandora

Pandora Media Inc. has asked major record labels for money or for better deal terms to help reverse losses and reduce pressure from impatient shareholders. That’s the word from Bloomberg, which reports that senior executives at Pandora have reached out to their label counterparts with several proposals. In addition to asking for direct investments from the labels, Pandora has sought to renegotiate licensing deals to reduce its costs. Sources tell Bloomberg that the labels “are unlikely to accede to the requests.”

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 has had to shell out more funds to pay for the music rights it needed to offer its new Pandora Premium on-demand service, and then spent even more money to further develop the technology and market it.

Pandora shares were down 4.20 percent yesterday to $10.95. The company lost $345 million last year, more than double its losses from the year before. That being said, however, Bloomberg says 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 that better days are ahead. Corvex Management, Pandora’s second largest shareholder, has been pushing for change, including a possible sale.