Satellite radio network SiriusXM said Friday it will invest $480 million in internet radio leader Pandora, forging a union between two companies that have operated on parallel tracks.
The move comes amid rapid changes in the music business as Pandora, which has seen its model lose ground to on-demand online platforms such as Spotify, last month appealed for buyers.
Pandora separately announced that it was selling Ticketfly, a ticketing company popular with independent rock venues, for $200 million to event management site Eventbrite.
The sale marks a significant loss as Pandora bought Ticketfly less than two years ago for $450 million, seeing it at the time as a new way to boost its fortunes by integrating ticket sales into the platform.
SiriusXM, whose core base of older listeners in cars has driven healthy profits, said it will pump $480 million into Pandora and take three seats on the internet radio station’s board, including chairman.
Jim Meyer, the chief executive officer of SiriusXM, said his company was upbeat about Pandora’s recent direction, which includes starting an on-demand service.
“This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today,” he said in a statement.
With the investment, SiriusXM will take a 16 percent stake in Pandora once, including the newly issued preferred stock.
SiriusXM agreed not to make further acquisitions in Pandora for 18 months and never to go beyond a 31.5 percent stake so long as the agreement is in force.
Pandora — best known for internet-generated radio “stations” based on users’ likes — had some 76.7 million active listeners as of last month.
While substantial, the number had dropped from a year earlier as the market shifts away from free, advertising-backed sites and toward paid subscriptions for on-demand music.
Led by Spotify as well as rivals such as Apple Music, Deezer and Tidal, streaming revenue soared by more than 60 percent globally last year alone, according to the IFPI industry group.
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