NEW YORK (AP) — Streaming music company Pandora said Wednesday it is buying ticket seller Ticketfly for $450 million in a deal the two see changing the way fans find new music and learn about concerts, and artists plan their tours.
Pandora says about 80 million people use its free service every month to listen to music and comedy on their computers and mobile devices. Ticketfly provides ticketing and marketing software for venues and event promoters, making it easier for fans to find and buy tickets.
The combination will allow them harness data generated by their users to tell fans when bands they like are in town and sell them tickets, while steering artists to areas where a lot of people give a "thumbs up" to their music on Pandora.
"We believe this acquisition closes the loop for Pandora by creating a one-stop-shop for artist discovery, marketing, and concert ticket sales," said Stifel Nicolaus analyst John Egbert. "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."
The deal, which is expected to be complete by the end of this year, comes at a time when fewer people are buying and downloading music and more are streaming it. Meanwhile, touring is becoming a bigger and bigger source of income for artists.
Pandora and Ticketfly say concert ticket sales in North America are growing and people are spending more money on live music, but about 40 percent of all concert tickets still go unsold. They say that is because fans often don't know that artists they like are in town, something they hope to remedy.
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, Egbert said. He said the purchase will make Pandora "the premier platform for independent artist marketing."
Pandora went public in 2011 and reported $921 million in revenue in 2014. Most of that comes from selling ads, although Pandora also sells subscriptions for $5 a month. The Oakland, California-based company has yet to report an annual profit.
Last year it launched a marketing platform for artists, followed this year by an audio messaging service artists can use to deliver messages to fans. This spring it worked with the Rolling Stones to promote their North American "Zip Code" tour. It also worked with the electronic music duo Odesza, boosting the profile of a group not nearly as well known as the Stones.
The companies say San Francisco-based 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. Egbert said Ticketfly had about $55 million in revenue in 2014 and should have $75 million to $80 million this year.
Pandora said Ticketfly investors will get $225 million in cash and $225 million in Pandora stock. Shares of Pandora Media Inc. fell $1, or 4.6 percent, to $20.98 on Wednesday.