Nine Characteristics of Successful Entrepreneurs

Have you ever thought about striking out on your own? After all, being your own boss can be an exciting prospect. However, owning a business isn’t for everyone. To be a successful entrepreneur, you must have — or develop — certain personality traits. Here are nine characteristics you should ideally possess to start and run your own business:

1. Motivation

Entrepreneurs are enthusiastic, optimistic and future-oriented. They believe they’ll be successful and are willing to risk their resources in pursuit of profit. They have high energy levels and are sometimes impatient. They are always thinking about their business and how to increase their market share. Are you self-motivated enough to do this, and can you stay motivated for extended periods of time? Can you bounce back in the face of challenges?

2. Creativity and Persuasiveness

Successful entrepreneurs have the creative capacity to recognize and pursue opportunities. They possess strong selling skills and are both persuasive and persistent. Are you willing to promote your business tirelessly and look for new ways to get the word out about your product or service?

3. Versatility 

Company workers can usually rely on a staff or colleagues to provide service or support. As an entrepreneur, you’ll typically start out as a “solopreneur,” meaning you will be on your own for a while. You may not have the luxury of hiring a support staff initially. Therefore, you will end up wearing several different hats, including secretary, bookkeeper and so on. You need to be mentally prepared to take on all these tasks at the beginning. Can you do that?

4. Superb Business Skills 

Entrepreneurs are naturally capable of setting up the internal systems, procedures and processes necessary to operate a business. They are focused on cash flow, sales and revenue at all times. Successful entrepreneurs rely on their business skills, know-how and contacts. Evaluate your current talents and professional network. Will your skills, contacts and experience readily transfer to the business idea you want to pursue?

5. Risk Tolerance

Launching any entrepreneurial venture is risky. Are you willing to assume that risk? You can reduce your risk by thoroughly researching your business concept, industry and market. You can also test your concept on a small scale. Can you get a letter of intent from prospective customers to purchase? If so, do you think customers would actually go through with their transaction?

6. Drive 

As an entrepreneur, you are in the driver’s seat, so you must be proactive in your approaches to everything. Are you a doer — someone willing to take the reins — or would you rather someone else do things for you?

7. Vision

One of your responsibilities as founder and head of your company is deciding where your business should go. That requires vision. Without it, your boat will be lost at sea. Are you the type of person who looks ahead and can see the big picture?

8. Flexibility and Open-Mindedness

While entrepreneurs need a steadfast vision and direction, they will face a lot of unknowns. You will need to be ready to tweak any initial plans and strategies. New and better ways of doing things may come along as well. Can you be open-minded and flexible in the face of change?

9. Decisiveness

As an entrepreneur, you won’t have room for procrastination or indecision. Not only will these traits stall progress, but they can also cause you to miss crucial opportunities that could move you toward success. Can you make decisions quickly and seize the moment?




Written By: Ruchira Agrawal
Source: Monster

Market Update: May 15, 2017


  • Overnight in Asia most indexes were up fractionally while Japan pulled back slightly. G-7 discussions focused on protectionist threats, which weighed on sentiment. North Korea also fired a new missile over the weekend, adding to tensions on the peninsula.
  • WTI crude oil prices are up ~3.0%, to $49.25/barrel, after energy ministers from Saudi Arabia and Russia agreed that extension to oil production cuts for an additional nine months, through March 2018, is needed.
  • European markets were mixed on either side of flat. Investors were positive on Christian Democrats state victory supporting Merkel’s hold on power, while oil move was also welcomed.
  • U.S. markets are moving higher, boosted by news on potential oil production cuts. Meanwhile, concerns over cyberattacks and Trump/Comey drama may dampen enthusiasm as trading progresses.


Key Insights

  • The economy remains on track for Q2 gross domestic product (GDP) growth of 2.0% to 2.5% despite mixed inflation readings and retail sales below forecast.
  • The Consumer Price Index (CPI) rose +0.2% month over month and up from the drop of -0.3% in March, however both year over year CPI (+2.2%) and year over year core CPI (+1.9%) were below expectations, triggering the rally in safe havens last Friday.
  • Retail sales (+0.4%) were also below expectations, but up from the prior month. When considering the improvement in consumer sentiment, it is important to remember that this data point (retail sales) and the performance of retail stocks, should not be viewed as an indictment of the U.S. consumer. Rather than a changing consumer, it is a change in consumer buying habits, which is combining to alter not only retail sales figures, but also pricing measures. Consumers are spending: 1) more online, 2) on experiences over goods, and 3) comparison shopping using mobile technology. Consequently, it is very difficult for the department store model to continue charging premium, retail prices.
  • Considering the unemployment rate of 4.4%, wage growth of +2.5% year over year, riding confidence and delayed tax refunds, the near-term (Q2) and longer-term (2017) GDP trajectory appears favorable. Clarity on tax reform could take these numbers even higher.

Macro Notes

  • Excellent earnings season but bar will soon be raised. First quarter earnings season has been excellent by almost any measure. Results beat expectations by more than usual, the overall growth rate is very strong, and guidance has provided above-average support for analysts’ estimates for the balance of 2017. But at the risk of raining on the earnings parade, we would note that comparisons will get tougher as we anniversary the earnings recession trough of 2016, while the risk that the corporate tax reform timetable gets pushed into 2018 has increased. Market participants generally expect fiscal policy to begin to provide an earnings boost by year end, an expectation that has become increasingly tenuous.



  • Chinese industrial production growth weaker than expected. Chinese industrial production growth came in at 6.5% vs. expectations of 7% and down from period month of 7.6%. On an absolute basis, the economy is still on track to meet its growth goals, though it looks like growth may have peaked for the year at the end of the first quarter. The government continues to crack down on excess leverage in the financial system; today’s numbers are unlikely to move them off that path.
  • Japan domestic demand, and prices, rise in April. We normally think of Japan as an export oriented economy, but domestic demand increased over 4% on a year-over-year basis, with the impact felt most strongly in demand for raw materials. Producer prices rose modestly last month against declining expectations and are running at 2.1% annually.
  • Bank of Japan. Just like the Federal Reserve (Fed) and the European Central Bank (ECB), the Bank of Japan (BOJ) is under some public pressure to outline how it intends to unwind both its zero-interest rate policy and the massive expansion of its balance sheet to 93% of the country’s GDP. Recent statements from BOJ Governor Kuroda suggests such policy announcements may be coming. The more good news that comes out of the Japanese economy, the more pressure the BOJ is under.
  • Win streak snapped, but lack of volatility remains. The S&P 500 snapped its 3-week win streak last week, with a modest 0.3% drop. One thing continued though and that was the incredibly small daily ranges and lack of overall volatility. On the week, the S&P 500 traded in less than a one-percent range (from high to low) for the second consecutive week ( only the third time since 1995). Additionally, the intraday range on Friday was 0.22% – the smallest daily range on a full day of trading in nearly three years.
  • Checking in on small caps. The lack of volatility isn’t just in the blue chips, as the Russell 2000 has traded in a range of only 6.8% over the past 20 weeks. That is the tightest 20-week range since at least 1990. After a big jump in the fourth-quarter, small caps have lagged large caps this year, as they continue to consolidate the late 2016 gains.



  • Italy: GDP (Q1)
  • UK: CPI & PPI (Apr)
  • Eurozone: GDP (Q1)


  • Russia: GDP (Q1)
  • Japan: GDP (Q1)


  • LEI (Apr)
  • ECB: Draghi






Past performance is no guarantee of future results. The economic forecasts set forth in the presentation may not develop as predicted. The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better. Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk. Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments. Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards. High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors. Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply. Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained. Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged. This research material has been prepared by LPL Financial LLC.

20 Hidden Sources Of Income Lying Around Your House

You can sell things online, like dolls, old appliances and books, for cash.

The unused items collecting dust in your home could be worth hundreds or even thousands of dollars. People tend to underestimate the value of their belongings, but buyers often are happy to pay serious cash for rare or limited items, said Jacquie Denny, founder of Everything But The House (EBTH), an online estate sale service. However, even everyday items can find a buyer.

Whether you’re on a cash crunch or want to do some heavy spring cleaning, check around your house. Find out which 20 things you can sell online and elsewhere for extra money.



Chances are that you and your loved ones have clothing that’s collecting dust in a closet. If these items are gently worn, you might be able to cash in by selling them. One of the easiest ways to unload your used clothing for cash is to sell items on consignment.

I’ve been selling clothes through a local consignment store for years and regularly receive 50 percent of the selling price for items I unload. To earn top dollar, look for upscale consignment stores that enjoy a lot of foot traffic. Additionally, you should find out what brands and items the store accepts and make sure your clothing meets the store’s standards.

You can also sell to an online reseller such as, which will send you a prepaid package to ship your items. ThredUP sellers can earn up to 80 percent of the marked price of their items.



If you paid big bucks for designer shoes or a handbag that you now rarely use, you can reclaim some of your money by selling these items online. Frugal living expert Lauren Greutman said she has sold shoes through Poshmark for up to 50 percent of the retail price.

You can snap a picture of the items you want to sell using the Poshmark app and list them instantly. Poshmark will send a prepaid box to ship items that sell and take a $2.95 commission for sales less than $15 and a 20 percent commission for sales above $15.



If you have an inherited necklace that isn’t your style, or an engagement ring you no longer wear because you’re divorced, you might want to consider selling these pieces for cash. Fine jewelry can be worth a lot, said Denny.

To make sure you get the full value of your jewelry, consider having items appraised beforehand. You can find an appraiser near you through the American Society of Appraisers’ site,, or sell online through an auction site such as You can also opt to sell to a jeweler or pawn shop, but it’s important to seek out quotes from several stores before doing so.



Many households have $400 to $800 worth of cash in the form of unused laptop computers, said Michele Perry, a consumer tech expert at electronics resale site Fortunately, sites such as Gazelle and make it easy to unload these unwanted laptops for cash.

With Gazelle, sellers can request quotes for their devices. They are then sent prepaid shipping boxes.

“You just send it back with your device, and we’ll send you cash,” Perry said. She went on to remind sellers to erase the data on their computers prior to sending them in.



Used cellphones are another tech item you can sell for cash — even if it’s damaged.

“Most devices still have value even if they are broken or damaged, as long as they are fully functional and just have a broken screen or need to replace a battery or button,” Perry said. In fact, sellers can net $75 for a broken iPhone 6S on Moreover, they can earn $185 if the item is in good condition with normal wear and tear.

Sellers can also unload old cellphones on sites like and or drop their phones into one of the more than 2,000 ecoATM kiosks located in shopping malls across the nation.



In 2015, $973 million worth of gift cards went unused, according to the professional services firm CEB. If you have gift cards you’re not planning to use, you can sell them for cash on sites such as,, and

The above sites purchase gift cards for less than face value and then resell them at a discount. For example, you can get back up to 92 percent of a card’s value at You also can exchange gift cards for cash at Coinstar Exchange kiosks in grocery stores.



If you have books you know you’ll never read again — or at all — you can easily turn them into cash by selling online. Check to see if you have any first edition books and books autographed by authors to start, said Denny of EBTH, as these items could be good sources of hidden cash.

Greutman recommended selling unwanted books on Amazon. Scan your books using the free Amazon Seller app, which tells you the current value. You can list your books with the app and price them based on Amazon’s pricing suggestions, she said. It’s important to note that Amazon charges 99 cents per item sold.

Additionally, sellers can unload unwanted books through, which doesn’t charge a listing fee. Start by visiting sites like and to see what your books might be worth.



It’s no secret that children outgrow their toys quickly. Luckily, you can make money selling your kids’ unwanted toys — especially larger items such as kitchen playsets. I made about $50 on a wooden train set for which I originally paid $75 by selling it through a consignment store.

If you have several smaller toys to sell, Greutman advised requesting a box from You can fill it with items and then ship it back to the company for free. Earning $25 to $50 per box is not uncommon, according to Greutman.



If you inherited a collection of porcelain dolls from your grandmother, it might be time to dig them out of storage. In fact, according to Denny, people are willing to pay top dollar for collectible dolls.

Additionally, individuals whose children have old American Girl dolls might be sitting on cash cows. These toys command a high price on, said Greutman. For example, a 2014 American Girl Doll of the Year recently had a list price of $399.99 on eBay. This listing is $285 higher than that of the current Doll of the Year sold by American Girl.



Make some extra cash by selling unwanted furniture that’s occupying space in your garage, attic or storage unit. Along with selling items in consignment stores, which offer owners a percentage of the final price, individuals can opt to advertise locally on Facebook, or OfferUp. blogger J. Money has made more than $1,000 selling items on Craigslist, including furniture. When listing an item on the site, he recommended posting several pictures, providing all of the dimensions, using keywords such as brand names in your description and researching prices of similar items. Additionally, you should make yourself available by phone or email to respond to interested buyers.



That guitar or drum set you bought years ago, because you thought you were going to start a band, can be turned into cash if your dreams of rockstardom never materialized. In fact, J. Money reported selling an electric guitar, amps and accessories on Craigslist for $225. You also can sell musical instruments online through sites such as, which charges a 3.5 percent fee on sales, or at a physical retailer such as Guitar Center.



Denny said that outdoor sporting goods, such as bicycles, canoes and fishing gear, tend to sell well on EBTH. If you have sporting goods you bought for yourself or your kids, you can sell them on your own through Craigslist or OfferUp.

Additionally, you can take sports gear — such as skis, golf clubs, baseball bats, gloves and football cleats and helmets — to a Play It Again Sports store and receive 30 percent to 50 percent of the selling price.



If you collected baseball cards or sports jerseys as a child, you might be able to exchange these items for much-needed cash. Signed sports memorabilia, in particular, can be a big source of income.

“The more famous the player, the higher the prices demanded,” Denny said. For best results, consider having your items appraised to determine how valuable they are.

You can find an appraiser through or have trading cards professionally authenticated through the Professional Sports Authentication at One of the best places to sell sports memorabilia is eBay, which many sports enthusiasts use to find collectibles.



If you have antiques you’re willing to sell, their value will hinge largely on their condition and whether they are rare or have historical significance, Denny said.

“With antiques, small scratches and evidence of light wear and tear can actually increase the value slightly, but structural damage and other repairs can be costly and dissuade sellers,” she said. “All these complicating factors are part of why it’s important to work with a reputable appraiser.”

The best way to secure top dollar for antiques is to sell them through an auction house, according to Consumer Reports. You can also sell to antique dealers, but be sure to get quotes from a few services before doing so. Additionally, you can sell antiques at EBTH, which offers appraisers who will value individual items or an entire estate.



Whether you have inherited artwork that isn’t your taste, or pieces you purchased are collecting dust in the attic, you can opt to sell these items for cash. In fact, I’ve sold numerous pieces of art at consignment stores.

For fine art, consider having items appraised before selling. Regional artwork sells particularly well in EBTH sales, said Denny. You can also sell your fine art through auction houses.



If formal dining isn’t your style, you can unload that china set you inherited or received as a wedding gift at a local consignment store. Denny said china is a popular item sold on EBTH — especially sets made by Spode, Lenox and modern designers, such as Ralph Lauren. Additionally, sellers can list china sets on Craigslist.



If you inherited some sterling silver trays, serving spoons or other items you don’t use, you might be able to earn cash selling them “as is” or for scrap.

“If the silver holds any sort of historical significance, or has any brand association, it will offer a much greater return than if you were to sell it to scrap,” Denny said. However, she acknowledged that the current market for silver is a difficult one.

At the present time, buyers might get more money selling silver pieces for scrap than at a consignment store or through an auction house. For best results, secure quotes from several metals dealers — both online and storefront.



You might have received — or even purchased — savings bonds decades ago only to forget about them completely. In fact, billions of dollars’ worth of matured savings bonds have never been cashed in, according to the U.S. Department of the Treasury.

You can use the Treasury Hunt tool at to discover whether you have Series E bonds issued after 1974 that are no longer earning interest and can be cashed in. The tool can also help you identify bonds you might have lost and claim them.



Small appliances that are old or broken can still have value, Greutman said. That’s because you can sell their parts on eBay. For example, a used Keurig K-cup holder recently had a list price of $29.90 on eBay.



You can cash in on those video games you or your kids no longer play by selling them online or at various brick-and-mortar retailers. Sites such as and NextWorth purchase used video games and offer free shipping. Additionally, you can sell used video games at retailers such as GameStop, which will pay cash or give you store credit to buy more hours of fun.



Written by: Cameron Huddleston
Source: GOBankingRates

How to Stop Social Media From Taking Over Your Life


In this day and age, it’s hard to live a full life without logging onto Facebook, Twitter, and Instagram every now and then. The problem is that they can become a huge waste of time.

There are a couple of easy ways to prevent yourself from squandering hours looking at cat photos. Here’s how you can tighten up your social networking by several notches. There’s also one surefire way to prevent social media from ruining your life: delete everything. More on that in a second.

Turn Off Push Notifications (or uninstall your mobile apps)


You might be surprised at how much control you have over the notifications pushed out by the social media apps on your phone. Take Facebook, for example. Head to notification settings and you can turn alerts on or off for wall posts, comments, friend requests, photo tags, photo invitations, messages, and more.

The next time you’ve got five minutes spare at lunchtime, rather than aimlessly scrolling through your feeds, cut down on the notifications these apps are allowed to send, which should cut down on the number of times they pull you into their reach.

Yahoo Going Back to the Drawing Board with Alibaba Spinoff

Marissa Mayer: FILE - In this Jan. 7, 2014, file photo, Yahoo president and CEO Marissa Mayer speaks during the International Consumer Electronics Show in Las Vegas. Yahoo announced Wednesday, Dec. 9, 2015, it is scrapping its original plan to spin off its prized stake in China’s Alibaba Group and will instead break off the rest of its business into a new company.
AP Photo/Julie Jacobson

SAN FRANCISCO — Yahoo’s long-running identity crisis is spiraling in a new direction now that the company is abandoning a year’s work on a tax-dodging spinoff to pursue an alternative path that will carve off its Internet business instead.

The about-face announced Wednesday opens another chapter in the dysfunctional drama that has been swirling around Yahoo for most of the past decade and raises more questions about the fate of websites and mobile applications used by hundreds of millions of people around the world.

Many of Yahoo’s 10,700 employees may also be fretting about their job security, with CEO Marissa Mayer promising to announce plans for a cost-cutting reorganization late next month and many analysts speculating that the company’s Internet business will be sold if the latest overhaul doesn’t bear fruit quickly.

The uncertainty and reshuffling threaten to cause more distractions at a time when Yahoo already is struggling to keep up in the race for digital advertising with bigger rivals such as Google and Facebook and nimbler startups. It also may raise more doubts about whether Mayer will be able to turn around Yahoo, even though company Chairman Maynard Webb said Wednesday that the board of directors remains in her corner after three-and-half years on the job.

“The bottom line is the saga continues,” Macquarie Securities analyst Ben Schachter wrote in a Wednesday note titled “The Never-Ending Story.”

The latest twists revolve around Yahoo’s efforts to avoid paying taxes on a $1 billion investment that it made a decade ago in one of China’s hottest Internet companies, Alibaba Group. That investment is now worth $32 billion, far more than the rest of Yahoo’s operations.

Yahoo began this year by drawing up plans to spin off the Alibaba stake into a separate holding company called Aabaco in what was supposed to be a tax-free move. But the Internal Revenue Service jeopardized the plan by refusing to guarantee the Alibaba spinoff would quality for a tax exemption.

Under mounting shareholder pressure, Yahoo scrapped that spinoff Wednesday and said that it will instead try to break off everything but the Alibaba holdings into another company. That process could be even more complicated than the original spinoff and take more than a year before Yahoo shareholders get stock in a newly formed company that has yet to be named.

“This means they have squandered an entire year and now it’s going to take another year while the core business continues to get weaker,” BGC Financial analyst Colin Gillis said.

With Yahoo hanging in limbo, prospective bidders could emerge for the company’s Internet operations, which Wall Street has been valuing at next to nothing amid a decline in revenue. Analysts believe Yahoo’s websites, mobile applications, ad services and well-known brand eventually could be worth $3 billion to $5 billion to a list of suitors that could include AT&T Inc., Verizon Communications, Comcast Corp., IAC/InterActiveCorp and private equity firms that specialized in buying troubled companies.

Webb, though, emphasized there are no plans to sell Yahoo’s Internet business. “We believe that we are tremendously undervalued and we think the best path to unlocking that value is by separating the Alibaba assets from our operating businesses and also turning around the performance in our operating business,” Webb said during a Wednesday conference call.

Those remarks seemed to disappoint investors hoping that Yahoo’s latest change in course might be a precursor to a sale. Yahoo’s stock fell $1.19, or 3.4 percent, to $33.67 in Wednesday’s afternoon trading. As Wall Street’s frustration with Yahoo’s follies has grown, the company’s stock has fallen by about 33 percent so far this year.

Yahoo’s board met last week to review Mayer’s stalled turnaround attempts, as well as whether to move ahead with the previously planned Alibaba spinoff. Although the board unanimously voted in favor of dropping the spinoff, it emerged from last week’s meeting with one less director. The company disclosed Wednesday that Paypal co-founder Max Levchin, a director recruited by Mayer, is resigning from the board to concentrate on running his latest financial services startup.

Mayer said she believes Yahoo’s Internet business in significantly better shape than when she arrived, largely because it is pulling in more traffic and advertising in the increasingly important smartphone and tablet market. Even so, Yahoo’s net revenue declined by 8 percent from the prior year in the third quarter and an even steeper decline is forecast for the current quarter ending in December.

When Yahoo announces those fourth-quarter results next month, Mayer also plans to unveil a shake-up that is supposed to jettison the company’s least profitable products and likely will lead to layoffs.

It will be the latest overhaul of a company that is now on its fifth full-time CEO in the past decade, all of whom have struggled to define what Yahoo’s mission should be. In the backdrop, Yahoo also has had to ward off a hostile takeover bid from Microsoft Corp. and quell shareholder uprisings spearheaded by activist investors Carl Icahn and Daniel Loeb. Another activist shareholder, Jeff Smith of the New York hedge fund Starboard Value, had threatened to lead a mutiny if Yahoo’s board hadn’t backed off from the Alibaba spinoff.

“The narrative around Yahoo and our valuation is complicated,” Mayer said Wednesday during an appearance on the financial news channel CNBC.

The handling of the Alibaba stake is crucial to Yahoo shareholders because of the money involved. If Yahoo is taxed on its gains from the fortuitous investment negotiated by co-founder Jerry Yang, the bill would exceed more than $10 billion.

Yahoo also owns a stake in Yahoo Japan that’s worth $7 billion to $8 billion. The revised plan calls for the Yahoo Japan holdings to move into the new company that will house its Internet operations.

Written by Michael Liedtke of Associated Press

(Source: MSN)

Why Pandora Needs the Music Industry More Than Ever

Provided by The Street

Pandora Media has put itself in a box.

The world’s largest Internet radio service wants to pay artists as little as possible for their songs. But it also needs their support — and music — to keep expanding beyond the U.S.

“The lower the royalty rate, the better it is for Pandora’s business,” Paul Verna, a media analyst at eMarketer, said in a phone interview. “But there’s also a flip side, which is that it risks exacerbating perception problems with musicians that Pandora’s rates are already too low.”

Pandora has run into a buzzsaw of criticism from artists led by Taylor Swift, Radiohead and, most recently, Adele, who claim that Pandora — along with Spotify and Apple Music — are siphoning off revenue from CD sales and digital downloads.

Later this month, the U.S. Copyright Royalty Board will set music streaming fees for the next four years. The ruling is expected around Dec. 15. While Pandora has been paying royalties below the industry standard since 2010, the company plans to abide by whatever the board decides. That likely means it will pay more money to artists and music labels.

But for Pandora, it’s probably worth it. With 78 million unique U.S. monthly listeners, Pandora is keenly aware that it has all but saturated its home market and needs to bring its Internet radio service global, to the U.K., France and Germany as well as Japan, South Korea and even China. (Pandora’s curated music platform is currently available only in the U.S., Australia and New Zealand.)

To expand, Pandora needs to make peace with the music industry over royalties — even if it’s expensive in the short term. Pandora shares have tumbled 29% in 2015 partly out of investor concern that it will have to pay royalty costs that account for more than its current level of 48% of its revenue.

“Pandora will have a good relationship with the industry when the industry feels like it’s getting a reasonable or fair market rate,” said the independent music label executive. “The lower that number, the more the industry think it’s not being treated fairly, and there will be very little good will.”

Either way, it will remove an unknown that has prevented the Oakland, Calif.-based company from negotiating directly with music labels for international streaming rights and for a subscription-based platform that it is building to rival Spotify and Apple.

But the Big 3 — Sony Music, Warner Music and Universal Music, a division of Paris-based Vivendi — as well as the world’s largest independent labels have been loath to negotiate international pricing with Pandora for fear that such settlements could influence where the Copyright Royalty Board sets rates for music streamed in the U.S.

“For a service like Pandora that wants to have a worldwide footprint, it has to be in negotiations with copyright owners,” said Ron Gertz, chairman and founder of Music Reports, a Los Angeles-based copyright fulfillment agency, in a phone interview. “The CRB’s decision will ultimately lead to opening up a worldwide licensing marker, and the parties will figure it out.”

Up until recently, Pandora and the world’s largest music labels have mostly clashed over royalty fees. Pandora currently pays music labels 14 cents for every 100 songs it streams, a rate that is actually lower than fees that the Washington-based CRB, a department of the Library of Congress, set for the past five years.

The industry agreed to the lower rates in 2010 so that Pandora could avoid insolvency. A Big 3 media executive, who spoke on condition of anonymity because he wasn’t authorized to discuss the matter publicly, said the industry “saw value in building their service and getting people accustomed to using streaming.”

But in the years since that agreement was signed, Pandora has sought to lower its royalty fees even further. Soon after its IPO, Pandora pushed for passage of the Internet Radio Fairness Act, which would have classified online streaming platforms as similar to terrestrial radio stations, which only pay songwriters.

In 2013, Pandora purchased KXMZ-FM in Rapid City, S.D., with the goal of being classified as a terrestrial radio operator. Under certain federal guidelines, ownership could provide Pandora with access to lower royalty rates. The Federal Communications Commission approved the deal in May.

“They weakened or lost a lot of alliances with creators and the labels when they were working on IRFA,” said an independent music label executive who also spoke on condition of anonymity.

Despite its differences with the music industry, Pandora’s business has grown as its listener base has mushroomed. By its own estimate, Pandora’s share of all U.S. radio listening reached 9.5% in September. Sales climbed to $311 million for the recently completed third quarter from $38 million during the same period in 2011, shortly after the company held its initial public offering.

While Pandora has paid out more than $1.5 billion in royalties during its 10-year history, music labels are clamoring for a larger cut.

In recent months, Pandora has appeared to be trying to smooth things over.

In October, it agreed to a $90 million settlement for its past use of pre-1972 music, and for its continued use of that music. Federal law was never particularly clear about royalties for artists who released music prior to 1972, leading to long-simmering enmity between Pandora and major labels for use of music by the likes of the Rolling Stones, Bob Dylan and Janis Joplin.

“That was like an olive branch,” said a music industry executive. “Pandora was clearly saying, ‘Let’s get this contentious issue off the table.'”

And then last month, Pandora struck a multi-year music licensing deal with Sony/ATV Publishing, the world’s largest music publisher, which is owned by Sony and the estate of Michael Jackson. The agreement was significant because Sony/ATV CEO Martin Bandier had been one of Pandora’s biggest critics.

The Sony/ATV deal was also significant because Pandora will need the music publishers on board if it is to expand internationally.

For Pandora, keeping royalty fees at 48% of revenue or less is integral to building a company that CEO Brian McAndrews has said can help the industry offset declining CD sales and digital downloads that have fallen by 33%, or about $2 billion, in the six years ended in 2014, according to the Recording Industry Association of America.

Toward that end, Pandora in October announced plans to purchase TicketFly, the concert promotion site, so that artists can better publicize their live performances directly with users selecting their songs. In November, it acquired the assets of Rdio, which it plans to use to build an international on-demand service, a feature that labels have been pushing the company to do for a few years.

Pandora declined to comment for this story.

The CRB’s ruling won’t directly affect Spotify or Apple, which operate on-demand services and have already negotiated directly with labels, large and small. Nonetheless, the rate-setting decision will establish a benchmark that will likely remake the global music industry for years to come.

“We all have to sit still and see what the CRB says before we talk directly with Pandora,” said a Big 3 music industry executive. “After they rule, we can start to have those conversations.”

Written by Leon Lazaroff of The Street

(Source: The Street)