Need to make more money from your customers? Here’s why a price hike might be your best option.
Internet music company Pandora is one of those businesses that can do well in the stock market just by not doing as badly as people expect. Revenue grew 58%, as was announced Wednesday, but losses more than doubled year-over-year. Now, most entrepreneurs don’t have to worry about keeping stock prices up, but there’s an important lesson to learn from Pandora’s roller coaster: Sometimes you need to face the music and ask customers to pay more.
Why Pandora Is in the Red
The ongoing problem for Pandora is that even as it grows, with the active audience increasing 53% year over year, so do the music royalties it must pay. As a result, its quarterly earnings reports have shown a constant flow of red ink. [read]