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Ad Revenue From Mobile for Pandora Increases

August 22, 2013 by

Pandora said it had $157.4 million in revenue for the quarter ending in July, up 55 percent from the same period a year ago.

The ad revenue Pandora collects from mobile devices, where the majority of its 71.2 million active users do their listening, has also shot up quickly. It made $116 million from these ads in the quarter, up 92 percent from a year ago. At that time the company was charging $22.17 for every 1,000 listening hours served to mobile devices, but last quarter that rose to a high of $33.90.

“Ninety-two percent growth on mobile growth to $116 million is pretty much crushing it,” Joseph J. Kennedy, the company’s chief, said in an interview after Pandora announced its earnings.

Pandora also reported a success in another closely watched figure: its “content acquisition” costs, which include royalties to music companies. For the quarter, it paid $81.9 million, or 52 percent of its revenue, on these costs, its lowest ratio in almost two years.

Since bottoming out in November, the company’s stock price has increased more than 200 percent, and some analysts have recently given Pandora optimistic reviews. But the imminent arrival of Apple’s own radio feature and Pandora’s growing expenses continue to worry investors.

Pandora’s stock closed at $21.71 on Thursday, up 1 percent for the day, but it fell more than 6 percent in after-hours trading.

In a conference call with journalists and investors, Pandora announced that it had recently spent $8 million on “a broad patent portfolio” from Yahoo.

Pandora also announced a policy change that may encourage more use of the service. On Sept. 1, it will drop the 40-hour monthly limit for free listening on mobile devices, which it instituted in March as part of an effort to reduce royalty expenses.

This article has been revised to reflect the following correction:

Correction: August 22, 2013

An earlier version of this article misstated the unit for which Pandora charged $22.17. It is every 1,000 listening hours, not every 1,000 ads.

Article source: http://www.nytimes.com/2013/08/23/business/media/ad-revenue-from-mobile-for-pandora-increases.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Support Grows for European Effort to Fight Tax Havens

April 14, 2013 by Leave a Comment

Miroslav Kalousek, the Czech finance minister, pledged to join the push for more automatic exchanges of bank records that already had the backing of Britain, France, Germany, Italy and Spain, a spokesman for the Czech representation to the European Union said Sunday.

The spokesman said the Czech minister made his overture on Saturday during a two-day meeting of European finance ministers where Poland, followed by Belgium, the Netherlands and Romania, also signed up, bringing the number of countries supporting the initiative to 10. The campaign is being strongly backed by the French finance minister, Pierre Moscovici.

For France, the issue has taken on greater urgency since Jérôme Cahuzac resigned as budget minister after acknowledging he had foreign holdings in Switzerland that he had previously denied.

“The surge in member states’ appetite for progress and action in the fight against evasion is extremely welcome,” Algirdas Semeta, the Union’s commissioner for taxation, said Saturday after two days of meetings in which ministers discussed adoption of Europe-wide laws modeled on the Foreign Account Tax Compliance Act, a U.S. initiative to find hidden accounts overseas.

“The tools are already on the table, waiting to be seized,” Mr. Semeta said, referring to plans in Europe to provide greater exchanges of information on interest earned on savings, including from trusts and foundations.

Mr. Semeta said that the European crackdown against tax evasion could eventually extend to dividends, capital gains and royalties, significantly expanding the revenue earned by national treasuries. He also encouraged countries to set an earlier date — it is currently foreseen as 2017 — for when those revenues are meant to fall under the microscope.

Europe is also being pushed toward greater transparency by the recent release of an investigative report on thousands of offshore bank accounts and shell companies, and by the prospect of a meeting of finance ministers from the Group of 20 leading economies on Thursday in Washington, where tax transparency is expected to be discussed.

In the French case, the Socialist government of François Hollande was deeply embarrassed by the revelations that Mr. Cahuzac had foreign holdings at a time of economic hardship for many citizens, and Mr. Moscovici led the calls for reforms at a hastily assembled news conference on Friday evening.

Taking leadership on the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” Mr. Moscovici said, flanked by Wolfgang Schäuble, the German finance minister, and George Osborne, Britain’s chancellor of the Exchequer, and by ministers from Poland, Spain and Italy.

The initiative should eventually cover “all kinds of revenues” and would be similar to the American tax compliance act, Mr. Moscovici said.

One European tax haven, Luxembourg, bowed to such pressure on Wednesday and said it would begin forwarding the details of its foreign clients to their home governments.

Standing in the way is Austria, which has resisted agreeing to an automatic exchange of banking information between E.U. countries.

Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they thought that Austria eventually would offer concessions. But the country’s finance minister, Maria Fekter, has showed no signs of backing down.

“We will fight for bank secrecy,” Ms. Fekter said on Saturday. “We are no tax haven,” she said. A day earlier she sought to portray Britain as one of the Union’s biggest tax havens.

Mr. Osborne said on Friday that he was pushing for more transparency from the Cayman Islands and British Virgin Islands.

More European countries are expected to join the campaign in coming weeks after Herman Van Rompuy, the president of the European Council, said on Friday that the bloc’s 27 leaders would discuss the issue at a summit meeting of leaders next month in Brussels.

Article source: http://www.nytimes.com/2013/04/15/business/global/support-grows-for-european-effort-to-fight-tax-havens.html?partner=rss&emc=rss

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Baauer’s ‘Harlem Shake’ Hits No. 1 With Unlicensed Samples

March 10, 2013 by Leave a Comment

He wasn’t alone. Jayson Musson, a rapper from Philadelphia, received an excited call from another member of the former rap collective Plastic Little, who told him that his voice could be heard on the hit song as well, yelling out the key phrase “Do the Harlem Shake!”

Neither gave permission to the song’s producer and writer, Harry Bauer Rodrigues, who records under the name Baauer, to use snippets of their records, they said. “It’s almost like they came on my land and built a house,” Mr. Delgado said.

Both Mr. Musson and Mr. Delgado are seeking compensation from Mad Decent Records, which put out the single last year. The label and Mr. Rodrigues declined to comment. But the tale of how an obscure dance track containing possible copyright violations rose to the top of pop charts illustrates not only the free-for-all nature of underground dance music but also the power of an Internet fad to create a sudden hit outside the major-label system.

Obtaining licenses to use samples has become standard practice in the music industry, and in most cases a license is needed from both the music publisher and the record label that made the master recording. Courts have held that even a short sample entitles the sampled artist to royalties; the amount is negotiable.

But small labels, like Mad Decent, sometimes lack the resources to have lawyers vet releases and instead rely on producers to make sure recordings are free of copyright problems. These labels frequently have little to do with the production of the tracks, especially in electronic dance music.

“You don’t have the same checks and balances that you would if it were done by a corporation with a legal department,” said David Israelite, the president and chief executive of the National Music Publishers Association.

“Harlem Shake” has been at the top of the Billboard 100 pop chart for three weeks and as of Friday had sold 816,000 digital downloads, according to Nielsen SoundScan. It benefited from a recent change in Billboard’s methodology to include YouTube views along with radio airplay and singles sales in its ranking.

The song was released last May on Jeffrees, a sublabel of Mad Decent that lets producers release dance tracks without signing a contract giving the label exclusive rights to the song, label executives told Billboard magazine. The label initially offered “Harlem Shake” as a free download, then began charging for it in June as part of EP.

But sales of the song did not shoot up until last month, when it became the soundtrack for a YouTube dance craze. The fad involved people posting wacky videos of themselves dancing convulsively in absurd costumes to the first 30 seconds of the track, which begins with Mr. Delgado, whose stage name was Hector El Father, singing, “Con los terroristas” (“With the terrorists”). Mr. Musson sings “Do the Harlem shake” 15 seconds into the track, a cue for the dancers to thrash around wildly.

As thousands of people uploaded videos, demand for the original track spiraled, and Baauer became an overnight star, appearing on the cover of Billboard.

The track has roots in Philadelphia’s dance and hip-hop scene, where Mr. Rodrigues, 23, of Brooklyn, has worked as a disc jockey under the name Cap’n Harry. Mr. Rodrigues told The Daily Beast that he found the recording of Mr. Delgado online. “The dude in the beginning I got off the Internet, I don’t even know where,” he said.

The sample can be traced back to Mr. Delgado’s 2006 single “Maldades” from the album “The Bad Boy,” released on Machete records, on which it was a refrain. He used it on other songs as well. “It’s like a trademark of Hector’s,” Mr. Gómez, the former manager, said.

In 2010 two Philadelphia disc jockeys — Skinny Friedman and DJ Apt One — borrowed the recording of the line to spice up a remix of another dance track by Gregor Salto called “Con Alegría,” which they released on their own Young Robots label on the album “Moombhaton de Acero.” They also included the snippet on a 2011 collection of beats for disc jockeys, “TA Breaks 3: Moombahton Loops and Samples.”

Mr. Delgado has yet to take legal action against the Philadelphia producers, whose remix was not a hit, Mr. Gómez said.

The recording of Mr. Musson’s exhortation to “do the Harlem Shake” comes from “Miller Time,” a 2001 rap by the Philadelphia group Plastic Little. In an e-mail Mr. Musson, who lives in New York and works under the name Hennessy Youngman, said he found out that Mr. Baauer had used his vocal line in late February, when a former member of the group, Kurt Hunte, pointed it out.

Mr. Musson said he called Mr. Rodrigues and thanked him for “doing something useful with our annoying music” Still, he said that he was negotiating with Mad Decent over compensation and that, though no agreement had been reached, the discussions had been friendly.

“Mad Decent have been more than cooperative during this,” he added in an e-mail. He declined to give details. Mr. Gómez said the founder of Mad Decent, the disc jockey Thomas Pentz, who records under the name Diplo, telephoned Mr. Delgado and his former manager, last month. Mr. Gómez said Mr. Pentz had told Mr. Delgado that he was unaware the single contained the vocal line from “The Bad Boy” when the single was released. Mr. Pentz declined a request to be interviewed.

Since that call, Mr. Gómez said, lawyers for Machete Music, which is owned by Universal Music Group, have been negotiating with Mad Decent over payment for the sample.

“Hector will get what he deserves,” he said. “We can turn around and stop that song. That’s a clear breaking of intellectual property rights.”

Article source: http://www.nytimes.com/2013/03/11/arts/music/baauers-harlem-shake-hits-no-1-with-unlicensed-samples.html?partner=rss&emc=rss

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Elan Raises $3.25 Billion in MS Drug Deal

February 6, 2013 by Leave a Comment

Under a deal announced on Wednesday, Elan’s partner Biogen Idec will take full ownership of blockbuster multiple sclerosis (MS) treatment Tysabri and will make an upfront payment to the Irish group plus royalties on future sales.

While the deal gives Elan scope to return some cash to shareholders as well as strategic flexibility to buy new assets, it leaves its future shape unclear since Tysabri was by far its most important product, responsible for almost all its revenue.

Elan has already spoken to several companies about potential deals and can move quickly once the sale its completed, Chief Executive Kelly Martin told Reuters.

“You can do a lot of things with $3 billion, you can buy companies, molecules, you can partner, you can share risk. The world is our oyster,” Martin said in a telephone interview.

“We are not necessarily restricting ourselves to one therapeutic area or one type of clinical asset. We will not be restricted to our past, which was by and large neurological.”

Martin said there were hundreds of small- to medium-sized drug companies with capital or capability needs, meaning there was an “enormous amount of transactions” Elan could do.

Shares in Elan, which fell sharply last year after the failure of a highly anticipated experimental Alzheimer’s drug, were 10 percent higher at 8.50 euros by 0950 GMT. The stock rose as high as 8.595 euros, its highest since mid November.

The Irish drugmaker has co-marketed Tysabri with the larger U.S. company for 12 years and said it would receive a royalty of 12 percent of Tysabri global net sales for the first 12 months after the deal is completed.

A tiered royalty structure will kick in after that, with Elan, in which U.S. group Johnson Johnson is an 18 percent shareholder, receiving 18 percent on up to $2 billion of global net sales and 25 percent on any sales over that level.

Sales of Tysabri rose 8 percent to $1.6 billion last year. A filing last month for approval to sell the drug as a first-line treatment for could boost sales further.

CRUCIAL TIME

The companies have long aimed to increase patient numbers over time to 100,000 from the 72,700 at the end of last year, a level that would make Tysabri a $2 billion drug, Martin said.

For Biogen, the deal boosts its MS business at a crucial time for the U.S. company, which hopes to win approval soon for a new pill to treat the debilitating neurological disease.

Its oral drug BG-12, to be sold under the brand name Tecfidera, is expected to become a leading treatment for MS after its planned second-quarter introduction.

Biogen will be able to offer BG-12 alongside Tysabri and another MS treatment called Avonex, both of which are given by injection, providing a range of treatment options for patients.

Rival providers of MS treatments include Novartis, Teva, Merck KGaA and Bayer.

There had been speculation in 2012 that Biogen might try to acquire Elan outright, following the failure of the Irish company’s Alzheimer’s drug bapineuzumab, which it was working on with Johnson Johnson and Pfizer.

That setback left Elan heavily reliant on Tysabri, which accounted for all but 200,000 euros of the group’s 1.2 billion euro full- year revenue reported on Wednesday.

As part of earlier plans to refocus its operations, Elan said last August it was spinning off its Neotope drug discovery business. It also sold its drug delivery business to U.S. firm Alkermes for $960 million in 2011.

Martin said the situation of relying on one asset and a single collaborator had not been ideal and the restructuring would allow the group to diversify.

“The strategic direction can actually be shaped because we have freed ourselves up from just having Tysabri to having the ability to add a multitude of assets, which we think over time will be a more balanced opportunity for shareholders,” he said.

Martin added that the company would likely return some cash to shareholders and said he had no immediate plans to step down as chief executive, after agreeing early last year to stay on longer than his scheduled retirement.

“With the $3.25 billion cash payment likely to be devoid of tax obligations, Elan has swapped hope for certainty in ceding control of the asset to Biogen,” Deutsche Bank wrote in a note.

(Additional reporting by Ben Hirschler; Editing by Hans-Juergen Peters and David Holmes)

Article source: http://www.nytimes.com/reuters/2013/02/06/business/06reuters-elan.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: In the World of Wireless, It’s All About Patents

August 16, 2011 by Leave a Comment

The Motorola shareholder Carl C. Icahn pronounced himself pleased with the deal.Rick Maiman/Bloomberg NewsThe Motorola shareholder Carl C. Icahn pronounced himself pleased with the deal.

Google, in announcing a $12.5 billion deal for Motorola Mobility on Monday, saved its warmest words not for Motorola Mobility’s management or its products, but for one valuable asset: the company’s roughly 17,000 patents, as well as an additional 7,500 patents that are under government review.

That intellectual property portfolio is a treasure trove for Google because the battle in wireless is one that is increasingly being fought in court.

Corporate warfare over patents is not new. Companies historically preferred to reach truces, choosing to cross-license their intellectual property rather than risking bigger losses in court.

But patent battles are no longer waged between just two competitors, like Intel and Advanced Micro Devices. Platforms like Android and Windows Phone 7 are built upon a handful of device makers, adding more players with different stakes at risk.

That has changed the calculus of settling, as product makers have become increasingly willing to sue rather than reach peaceful settlements.

“Now you’re seeing more suits being brought by product companies willing to step up and say we will defend our patents,” said Colleen Chien, an assistant professor at the Santa Clara University School of Law.

Apple has sued important Android phone makers like HTC and Samsung, while Oracle has taken Google to court. The fighting has been likened to a “patent arms race.”

“The best way to fight a big portfolio of patents is to have your own big portfolio of patents,” said Herbert Hovenkamp, a law professor at the University of Iowa. “That appears to be what Google is doing here, arming itself with patents to be able to defend itself in this fast-growing market.”

Large sums hang in the balance, especially if phone makers are forced to pay out royalties for each handset they make. Microsoft has already persuaded HTC to pay a fee for every Android phone manufactured, and is seeking to extract similar royalties from Samsung.

If left unchecked, such payments could make creating new devices for Android prohibitively expensive for manufacturers, forcing them to turn to alternative platforms like Windows Phone 7.

“With a slim patent portfolio, Google is especially vulnerable to lawsuits against its Android licensees, if not itself,” Charlie Wolf, an analyst with Needham, wrote.

By acquiring Motorola Mobility, Google is seeking to ensure that growth in the Android market will not be choked by the burden of royalties.

The importance of bulging patent portfolios became clear this summer after a consortium led by Apple, Microsoft and Research in Motion, the maker of the BlackBerry, paid $4.5 billion for some 6,000 patents held by Nortel Networks, the Canadian telecommunications maker that filed for bankruptcy.

Google, which initially offered $900 million for the collection, fell short after several bids. Shortly afterward, Google executives complained that the company’s rivals had banded together to smother its Android system with patents.

“We’re determined to preserve Android as a competitive choice for consumers, by stopping those who are trying to strangle it,” David Drummond, Google’s chief legal officer, wrote in a blog post earlier this month.

In a sign of how badly it appeared to want Motorola Mobility’s patents, Google offered $40 a share, a rich 63 percent premium to Motorola’s closing price on Friday. Analysts at Jefferies calculated that, of the $12.5 billion offer price, Google was essentially paying $9.5 billion for the patents.

And analysts at Canaccord Genuity estimated that the price per patent was higher than the $4.5 billion total that bidders paid for the Nortel patents.

Though companies like Google may be snapping up thousands of patents at a time, they are looking for the few that cover their competitors’ products. Among the most valuable components of the Motorola collection, according to analysts, are those that cover cellular radio technologies like 4G data speeds.

It was the high price fetched by Nortel’s patents that opened the eyes of Motorola’s directors, people briefed on the matter said.

By the end of the Nortel sales process, Motorola had begun holding talks with a number of potential partners about how to reap value from its larger collection of patents. Some of the offers focused on simply licensing Motorola’s patents.

Of Motorola’s suitors, Google had the benefit of having worked closely with the handset maker on the first truly popular Android phone, the original Droid for Verizon Wireless. Over a matter of weeks, Google’s bid evolved into a takeover of the entire company.

Late last month, one of Motorola’s biggest shareholders, the activist investor Carl C. Icahn, specifically called upon the company to “explore alternatives” for its patent portfolio. Mr. Icahn said that there were “multiple ways” to realize such value, suggesting even then that he was open to a sale.

The investor was not a catalyst for any decision by Motorola’s board, though his support for a range of possible actions was helpful, the people briefed on the matter said.

By the beginning of last week, the search engine giant emerged as a front-runner, and by Sunday evening clinched the deal at a vote by Motorola’s board.

Mr. Icahn, a longtime gadfly who once sued Motorola to jolt it into action, praised the deal on Monday as “a great outcome for all shareholders.”

Motorola’s sale left many investors looking for the next company that could be acquired for its intellectual property, especially other struggling phone makers. Shares of Research in Motion jumped 10.4 percent on Monday, while American depositary receipts of Nokia leaped 17.4 percent.

In January, Motorola split itself into two separate companies: Mobility, which makes cellphones and set-top TV boxes, and Solutions, which makes radio equipment for corporations and governments.

Steve Lohr contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=9dec1616ee5e6144006ac3245ef5dc65

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