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Pandora’s Cakebread Speaks

Internet music service CFO talks about Pandora’s operations and future

Tim Westergren, Pandora’s founder, is the public face of the Internet music service. However, recently, Steve Cakebread, Pandora’s chief financial officer, spoke with Rocco Pendola, a contributor to Seeking Alpha, an Internet financial information site.

He provided some interesting numbers to what for many is a new and seemingly opaque business.

Topic one was the worry many had that Internet music providers such as Pandora would be hamstrung by data usage limitations (caps) on mobile devices.

Cakebread dismissed those concerns by providing usage numbers and noting that Pandora uses an efficient transmission codec, AAC+, rather than the data-heavy MP3. Pendola quoted Cakebread that an hour of listening to Pandora consumed a mere 14 MB therefore one would have to listen to almost 150 hours per month, exclusively on a mobile device, to approach the standard 2 GB per month cap. Pandora’s listenership numbers indicated that the typical listener listened less than 20 hours a month.

Pendola also inquired about whether in the long run performance royalty costs wouldn’t eat away at Pandora’s profitability, how Pandora was getting into the coveted automobile dashboard and asked about the extent of insider share sales.

The article is here.