October 7, 2015 at 4:54 PM CDT - Updated July 25 at 4:30 AM
NEW YORK (AP) - Streaming music company Pandora says it will buy Ticketfly for $450 million in a move that takes the company into ticket sales and event marketing.
Pandora runs a free music streaming service and says 80 million people use Pandora to listen to music every month. The Oakland, California-based company went public in 2011 and reported $921 million in revenue in 2014, mostly from selling ads, but it has yet to report an annual profit.
Ticketfly provides ticketing and marketing software for venues and event promoters to make it easier for fans to find and buy tickets. The companies say concert ticket sales in North America are growing and people are spending more money on music, an increasingly important source of income for artists, but fans often don't know that artists they like are in town.
The companies say Ticketfly sold 16 million tickets to 90,000 events last year, with the value of those tickets surpassing $500 million. They added that 14 million people visit Ticketfly's sites each month.
Pandora said its offer is half cash and half stock. Shares of Pandora Media Inc. fell $1.40, or 6.4 percent, to $20.58 in midday trading Wednesday.
Pandora launched a marketing platform for artists last year, followed by an audio messaging service artists can use to deliver messages to fans, and says it is focusing more on live music. This year it worked with the Rolling Stones to promote their North American tour. Pandora created a "Zip Code" tour radio stations where listeners could hear a digital mix tape with songs chosen by band members and an interview of the Stones by Anthony DeCurtis.
But analyst John Egbert of Stifel Nicolaus says Ticketfly's main business, and the source of Pandora's interest, is with smaller venues and independent artists because that's where most concert tickets are sold. He said the purchase will make Pandora "the premier platform for independent artist marketing."
"We believe this acquisition closes the loop for Pandora by creating a one-stop-shop for artist discovery, marketing, and concert ticket sales," Egbert said. "Pandora can now share in the upside of live music industry growth that is undoubtedly being driven in large part by rapid growth in streaming music consumption."
He said Ticketfly had about $55 million in revenue in 2014 and should have $75 million to $80 million this year.
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