On a 30-day deadline to find a possible buyer, internet radio leader-turned-streaming service Pandora is now reportedly considering to instead offload its nascent ticketing business: The company may sell its Ticketfly subsidiary, which it acquired a little over 18 months ago for $450 million, according to a Bloomberg report.
Pandora is still looking for a buyer for its entire company, Bloomberg reported Monday. The music streaming service announced a 30-day hunt for an acquirer last week when it also revealed a $150 million investment from private equity investment fund KKR.
The company is essentially on a shot-clock, and is looking to close a deal before the KKR investment closes. But Pandora executives have long insisted that they’d want to stay independent. Selling Ticketfly could be one avenue to achieve that, but there are a few other reasons why Pandora might be looking to exit the ticketing business.
One is in the numbers. Ticketfly has been growing steadily, but it’s still a very small part of Pandora’s business. During Q1 of 2017, Ticketfly’s revenue was just $27.8 million, compared to $223.3 million in advertising revenue and $64.9 million in subscription revenue.
Pandora now plans to aggressively grow its subscription business, and win millions of paying users for its new Pandora Premium service. The company may decide that it simply can’t have that many horses in the race, and cut its losses on Ticketfly.
But selling Ticketfly may also be a sign that Pandora bet on the wrong horse to begin with. That’s according to former Ticketmaster CEO Nathan Hubbard, who took to Twitter Monday to argue that Ticketfly just wasn’t the right fit for Pandora.
“When the deal happened, I remember press describing how Pandora had sold lots of Rolling Stones tickets in testing. They pushed this hard,” Hubbard wrote in a tweet storm. “This supposedly justified the deal. But…you and I could sell out Stones tix on a random corner in anytown USA. It’s a measure of nothing.”
Hubbard went on to argue that the ticketing business is essentially too tied up by the big guys — companies like his former employer Ticketmaster — for Ticketfly to make a dent.
Pandora had originally envisioned a virtuous cycle, where the service was able to use its massive treasure trove of data to connect artists with fans and get them to buy tickets to shows. Hubbard said that might be true, but not big enough of a business.
In the end, Pandora may be better of selling Ticketfly and work with all of the other vendors, he argued.
Pandora declined to comment when contacted for this story.