Pandora: iTunes Radio will be great -- for Pandora
"We've yet to see any direct-licensing deal internationally that's financially viable," he said, referring to how competitors have gone about international expansion. He added that in Australia and New Zealand, associations of songwriters and performers were willing to set rates that made the economics of entering there work for Pandora. The company is "hoping to do a couple things there" that prove its bona fides abroad and how Pandora's entry in the market "is beneficial for the artists," Herring said. "If we do that there, then we'll be able to have those conversations in the rest of the world," he said. Pandora, as the biggest Internet radio service, has come under fire from musicians in the past for how little they're paid to be played on Pandora. Pandora has said it's still paying artists much more than FM radio, which broadcasts music for free. Even at a level of royalties that artists have grumbled about, licensing costs still take up roughly two-thirds of Pandora's revenue, which is mainly driven by ads.
