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Pandora loss widens as costs jump; shares plunge after hours

Pandora Media, a provider of music streaming services, reported a bigger quarterly loss as content acquisition costs nearly doubled, sending its shares sharply lower after hours.

The company said on Thursday it agreed to a $90 million settlement with a coalition of record companies for use of their recordings created before 1972.

Pandora said it recorded $57.9 million of the total settlement fee in the third quarter ended Sept.30.

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The settlement follows satellite-radio company Sirius XM's $210 million settlement in June with the same coalition.

The coalition includes ABKCO Music & Records, Capitol Records, Sony Music Entertainment, UMG Recordings and Warner Music Group.

Pandora offices
Source: Pandora

It ends part of a long-running battle between the music industry and broadcasters over the right to play songs recorded before Feb. 15, 1972.

Pandora forecast fourth-quarter revenue of $325 million-$330 million. Analyst on average were expecting $351.8 million, according to Thomson Reuters I/B/E/S.

Pandora's net loss widened to $85.9 million, or 40 cents per share, in the quarter, from $2 million, or 1 cent per share, a year earlier.

Revenue rose to $311.6 million from $239.6 million, but this was far short of the average analyst estimate of $313 million.

Pandora's shares were down 20.5 percent at $15.25 in after-market trading.

Up to Thursday's close, stock had risen 7.6 percent this year.