As the paper outlines, it also offers advertising and premium subscription where companies can put advertisements to target certain people. Customers can also buy subscriptions for a few dollars a month to omit the ads. High cost of operating and other costs such as inconsistency costs means that Pandora does not have full market control. In time, Pandora will not enjoy market advantages since it will have less control of the market due to the evolution of the mobile era.
More of the music downloaded is normally done illegally without the knowledge of the artists or the music labels. This has turned into a normal type of crime. Most people download songs for free and see no harm caused to the artists and record labels who normally incur losses for their work.
With time, mobile revenues will improve since the world is moving to a more digitalized era. This means that the company should sell it premiums directly rather than relying on 3rd parties who are normally associated with other costs.
The copyright law which is the body protecting artist’s work from being copied without their authorization should intensify and rise with good legislation which would see the reduction in piracy. The legislation is good for the music industry since Pandora is able to pay the artists and record companies.
Pandora pays hundreds of millions to artists and labels. At least of the royalty rate is fair and reasonable of which both parties do benefit. Pandora can make a profit, and the artists and music labels also generate some income.
Record labels are things of the past. Music labels and online stores should be able to pay artist much more fairly. They should not rely on producing CDs since they are things of the past and the world is changing. Hopefully more and more artists will bypass getting record contracts.