[hohead]

Interesting analysis.

Based on their cost of $0.02 cents per listener hour, I wanted to calculate how many hours per day my $36 yearly payment equates to (ignoring their operational costs):

($36 / $0.02) = 1800 hours per year

1800 hours per year = 4.93 hours per day

[sliverstorm]

Sounds like the pricing structure all works together very well, then. 5 hours per day sounds like a good point which plenty of people can easily eclipse, but the majority will not, keeping the service profitable.

[Retric]

Licencing is hardly there only cost.

[sliverstorm]

Yes, but they said it was 50% of revenues. I believe Pandora is profitable, so the sum of all other costs must be less. This means that the breakeven point is actually somewhere between 2.5-5 hours. 5 hours per day is not a magic number- I think 4 or 3 also sound perfectly fine, based on the usage patterns I see.

[spullara]

Pandora is actually operating at quite a big loss:

http://finance.yahoo.com/q?s=P&ql=1

[tsotha]

I don't see much value in an analysis that ignores operational costs.