Pandora


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PRESS RELEASE


Billboard and Pandora today (Jan. 30) announced an exclusive agreement that will add influential Pandora streaming data to the Billboard Hot 100, the world’s preeminent songs chart. The Hot 100 ranks the week’s most popular songs across all genres, determined by a formula blending track sales, radio airplay and streaming, as measured by Nielsen Music, now along with Pandora’s exclusive streaming data, as well.

In addition, Pandora will also impact Billboard’s streaming-based charts, and Hot 100 formula-based genre rankings: Hot Country Songs, Hot Rock Songs, Hot R&B/Hip-Hop Songs, Hot Rap Songs, Hot R&B Songs, Hot Latin Songs, Hot Dance/Electronic Songs, Hot Christian Songs and Hot Gospel Songs.

Pandora data will be incorporated into the Billboard charts noted above dated Feb. 11 and revealed on Billboard.com on Tuesday, Jan. 31.

Pandora data positively impacts 35 titles on the Hot 100, including nine songs that improve in rank by five or more places if compared to the chart absent of Pandora data. Among the titles showing such marked improvement thanks to Pandora plays are Rob $tone’s “Chill Bill,” featuring J. Davi$ and Spooks, Bebe Rexha’s “I Got You” and Rihanna’s “Sex With Me.” “Chill Bill” is among Pandora’s top 10 most-streamed songs of the week, which helps it place more than 10 spots higher on the Hot 100 than if Pandora data had not been added.

In addition, looking at songs that appear on the Hot 100 that didn’t a week ago but now do thanks in part to Pandora’s influence, Callum Scott’s first Hot 100 hit, “Dancing on My Own,” debuts and Lady Gaga’s “Million Reasons” re-enters.

“Billboard’s unrivaled charts are the definitive source for ranking music popularity. For decades, the charts have acted as a place where both artists measure success and fans discover music,” says John Amato, co-president of The Hollywood Reporter-Billboard Media Group.

“Close to 80 million music lovers listen to Pandora every month and we look forward to bringing our brands together to incorporate Pandora’s data into our charts.”

“We’re thrilled to bring Pandora aboard as a contributor to our songs charts,” says Silvio Pietroluongo,‎ VP of charts and data development for Billboard. “The music tastes and listening habits of Pandora’s large and influential user base are elements that we’ve longed to include as a measure of song popularity in the Hot 100 and various other Billboard charts.”

Pandora founder and CEO Tim Westergren, who, along with Pandora artist advocate Questlove was featured on the cover of the Billboard issue dated Jan. 28, says,

“Over the last few years, Pandora has shared more and more data with the music industry. We started with artists and managers, then direct-deal label partners, and now Billboard for inclusion in the iconic Hot 100 chart. With each step along the way, our partners have been shocked by the sheer size of Pandora’s audience. Pandora is now the No. 1 radio station in 87 U.S. markets and represents roughly 10 percent all radio listening. With the inclusion of Pandora data, the Billboard charts that have guided listeners and been so central to the music industry for decades now reflect a truer measure of a song’s popularity today. I’m thrilled that the ‘Pandora effect’ will now be formally recognized in the industry’s gold standard for measurement.”

“Next Big Sound has been a data partner of Billboard’s since 2010, with the introduction of the Social 50 chart,” adds Alex White, head of Next Big Sound at Pandora. “Based on our years of data expertise across social and streaming sources, we know the staggering volume of Pandora data that has not been counted. We project that the Pandora data will have hit a material impact on chart positions. I am excited that the Hot 100 will now include the enormous number of spins on Pandora.”

Pandora joins other programmed music streaming services as Billboard chart contributors, including Slacker, Google Radio, Napster and AOL Radio, among others, as well as on-demand subscription services including Spotify, Apple Music, Tidal, Amazon and SoundCloud, and video on-demand platforms YouTube (including Vevo on YouTube) and VidZone. Note that the latter on-demand streaming services are weighted at a higher value on weekly charts than programmed streaming services, reflecting their more active consumer interaction.


#2

Pandora has appointed Alison Pavey into the newly created role of programmatic sales director.

Pavy joined Pandora more than two years ago and was previously a senior sales executive. Prior to Pandora, she held senior sales roles with Mi9 and Microsoft in Australia and the UK.

In her new role, Pavy will oversee the growth of Pandora’s programmatic offering as the music streaming company extends its presence and product portfolio.

Pandora commercial director ANZ Chris Freel said:

“I am delighted that Ali is moving into this pivotal role as we supercharge our programmatic offering through 2017. Her promotion is a true testament to the strength of talent within Pandora. Ali is obsessed with driving results for our advertising partners and has the rare ability to combine the technical elements of marketing with the creative and emotional side. As programmatic evolves in this market her skills will be invaluable in helping to drive our progression.”


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#4

SiriusXM (NASDAQ: SIRI) and Pandora (NYSE: P) today announced an agreement under which SiriusXM will make a $480 million strategic cash investment in Pandora.

Under the terms of the agreement, a subsidiary of SiriusXM will purchase an aggregate of $480 million in newly issued Series A convertible preferred stock of Pandora. SiriusXM purchased $172.5 million of Series A preferred stock upon execution of the agreement and has agreed to purchase the balance of the Series A preferred stock at a second closing. The Series A preferred stock will represent a stake of 19% of Pandora’s currently outstanding common stock and a 16% stake on an as-converted basis.

The Series A preferred stock is convertible into common stock at a purchase price of $10.50 per share. The conversion price of the Series A preferred stock is approximately a 14.2% premium to Pandora’s volume weighted average price for the 20-day period preceding June 9, 2017. The Series A preferred stock will bear a 6% cumulative dividend, payable in cash, accretion of the Series A preferred stock or a combination thereof.

Through this agreement, SiriusXM is making a strategic investment in the leading U.S. provider of ad-supported digital radio. With a loyal quarterly audience of nearly 100 million listeners in the U.S., Pandora is by far the leading player in the burgeoning digital audio advertising market. The capital provided through the SiriusXM investment will allow Pandora to make targeted investments and capitalize on opportunities to build on its position in the streaming radio business.

Jim Meyer, Chief Executive Officer of SiriusXM, said, “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. Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders.”

“Liberty Media has long recognized the strength of the Pandora brand and the opportunities in the ad-supported digital radio market,” said Greg Maffei, Chairman of the SiriusXM Board of Directors and Chief Executive Officer of Liberty Media Corporation. “We are very supportive of SiriusXM’s strategic investment.”

When the transaction closes, three individuals designated by SiriusXM will be named to the Pandora Board of Directors. One of those individuals will serve as Chairman and SiriusXM designated directors will serve as select Board committee representatives. With these appointments, the Pandora Board will be expanded to consist of nine directors.

“Pandora’s Board and management team are committed to driving stockholder value and have carefully evaluated alternative strategies as part of the process disclosed on May 8,” said Tim Leiweke, member of Pandora’s Board of Directors. “We are pleased that the conclusion of that process resulted in a major investment by SiriusXM. With this investment, we have the backing of one of the media industry’s most successful investors and significant capital to accelerate growth. Pandora is now poised to advance to the next stage of the company’s lifecycle. Lastly, this transaction ensures that Pandora stockholders get the benefit of additional capital from an important strategic investor who can help enhance stockholder value.”

“The investment from SiriusXM infuses resources to help Pandora continue to grow and innovate,” said Pandora CEO and founder Tim Westergren. “With the strategic review behind us, and a strong balance sheet, we look forward to focusing on business execution and the optimization of our strategy.”

In connection with the transaction, Pandora agreed with an affiliate of Kohlberg Kravis & Roberts to terminate their Investment Agreement announced on May 8, 2017, and pay KKR a termination fee of $22.5 million.

Pandora is required to redeem the Series A preferred stock on the fifth anniversary of the closing for an amount equal to its liquidation preference plus all accrued and unpaid dividends. Pandora can also redeem the Series A preferred stock at any time after the third anniversary of the closing if the daily volume weighted average price of Pandora’s common stock is greater than or equal to 175% of the then applicable conversion price for a period of at least 20 days during a 30 day trading window prior to the notice of redemption.

SiriusXM will be subject to certain standstill restrictions, including, among other things, that it will be restricted from acquiring additional securities of Pandora for 18 months. After that period and for so long as a director designated by it is serving on the Board of Directors, SiriusXM has agreed not to acquire more than 31.5% of Pandora’s equity securities without the approval of Pandora’s Board of Directors.

The second closing contemplated by the agreement is subject to customary closing conditions, including antitrust approval, and is expected to close by the fourth quarter. The agreement may be terminated by either party if closing has not occurred by February 1, 2018.

Additional information relating to the SiriusXM investment may be found in the Form 8-K that will be filed by Pandora with the U.S. Securities and Exchange Commission.

Allen & Company LLC and BofA Merrill Lynch are serving as financial advisors to SiriusXM and Jones Day and Simpson Thacher & Bartlett LLP are serving as its legal counsel. Centerview Partners LLC and Morgan Stanley & Co. LLC are serving as financial advisors to Pandora and Sidley Austin LLP and Wachtell, Lipton, Rosen & Katz are acting as legal counsel.


#5

Pandora has announced it is shutting down its Australian operation.


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