The More Pandora Sells, the More It Loses

A tenth of a cent might not sound like a lot of money. But Pandora Media Inc.’s 18 percent stock drop Wednesday is a sobering reminder that those fractions add up — especially when advertising sales don’t keep pace.

Pandora’s music royalty costs, typically paid in tenths of a cent, are skyrocketing. At the same time, the more people who listen to Pandora via mobile devices, such as on smartphones, tablets or through car dashboards, the less advertisers pay to reach those listeners, compared to the ones listening on desktop or laptop computers.

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