TC Teardown: Pandora – The Tough Business of Webcasting

This is a guest post from Michael Robertson, a 12-year veteran of the digital music business. He is the founder and former CEO of digital music pioneer MP3.com. He is currently the CEO of music locker company MP3tunes. Until recently he was an adviser to Google Voice following the acquisition of Gizmo5. Pandora is the widely popular web radio service. Publicly they have said that they turned the corner to profitability in the 4th quarter of 2009. Below I forecast the 2010 numbers for Pandora using information from Pandora, music royalty rates that all webcasters are obligated to pay, and standard expenses of running a California based technology start-up.