Minutes after Pandora reported record, but still unprofitable, earnings and user growth, Slacker CEO Jim Cady took aim at his competitor's business model: “Pandora grew revenue, but will continue to struggle with profitability until they rethink their licensing structure,” Cady said. “Controlling costs by punishing users with a listening cap is a dicey strategy; we’re seeing our audience grow by 10-15% in the second half of every month as Pandora users hit the cap and come to Slacker.
Slacker has cut direct licensing deals with rights holders, and not added listening caps for free users.
“Slacker’s model allows us to be margin-profitable on every user, free or paid, no matter how long they listen,” Cady added. “Expanded content rights allow us to complement our ad-driven business with a higher-margin subscription service that delivers on on-demand plays, offline listening, unlimited track skips and more, which Pandora can’t offer.”