"Crying To Congress Will Not Save Pandora's Investors"

An excellent post by Stephen Faulkner on Saving Alpha:

The writing is on the wall here. Pandora is crying to congress for help because they can’t turn a profit by giving away content to users for free with limited exposure to advertising, and because they can’t get enough paying subscribers from their extensive base of “free” listeners. If I were an investor, I’d sell immediately just like the insiders have been doing en masse, or at the very least I would demand some real answers from Tim Westergren on why he can’t make this business model “work.” Pandora is a nice little service for some free music, but it’s a terrible business and one which investors should stay away from.