Pandora Posts a Loss but Continues to Expand

By BEN SISARIO

A year after going public, the popular Internet radio service Pandora is still expanding rapidly, with growth in audience size and revenue. But Pandora Media, the company behind it, continues to post a loss, as its revenue has not kept up with music royalties and other costs.

Pandora, which lets users create free music streams tailored to their tastes, had $101.3 million in revenue for the three months that ended July 31, a 51 percent increase from the same period last year. That was slightly better than the $100.9 million that analysts had expected, according to Thomson Reuters.

Its results helped Pandora's shares rise 9 percent in after-hours trading on Wednesday. The stock had closed at $10.08, down 1 percent for the day. The stock is down 37 percent from its opening price in July 2011.

Pandora now has 54.9 million listeners each month. In the last three months they listened to 3.3 billion hours of music, up 86 percent from last year.

dRevenue related to use of the service on mobile phones - which counts advertising as well as some revenue from paid subscriptions - was up 86 percent to $59.2 million. A majority of the listening to Pandora is done on mobile phones, although the company has struggled to increase the amount of money it can make from mobile advertising.

“This quarter demonstrated that our mobile monetization strategies are working,” Joe Kennedy, the company's chairman and chief executive, said in a statement.

But Pandora had a net loss of $5.4 million, or 3 cents a share, for the quarter, its sixth quarterly loss in two years. For the same period last year, the company lost $3.2 million, or 4 cents a share.

Pandora's largest expense is music royalties, which increase with each listener. For the quarter, it paid $60.5 million, or slightly less than 60 percent of its revenue, in royalties to record labels, artist s and music publishers. Its current fee structure is based on a negotiated discount to a rate set by federal statute. And although the next round of royalty negotiations is not expected to begin until 2014, Pandora has already begun lobbying in Washington over its rates.

To offset rising royalty costs, Pandora has been building up local advertising sales teams around the country, and also pushing to be included in ad networks that would put its service into direct competition with terrestrial radio stations.

After withdrawing from many foreign countries several years ago because of music licensing problems, it is now taking its first steps to return to overseas markets, starting with Australia and New Zealand. A regulatory filing last month suggested that Pandora is paying lower royalty rates there than it does in the United States.

“Our dream,” Mr. Kennedy said in a conference call with investors, “is to one day have billions of people listening to P andora around the world.”

Study Suggests a \'7 Percent Solution\' for Mobile Marketing

By STUART ELLIOTT

A consultancy that helps marketers improve the effectiveness of their advertising spending is proposing that they significantly increase the amount of money they spend in the United States on ads on smartphones, tablets and other mobile devices.

The consultancy, Marketing Evolution, is offering its advice in a study that was released on Wednesday during a Webinar. The study recommends that an average of 7 percent of total ad spending be devoted to mobile marketing â€" a stark contrast to estimates that the current average mobile budget is 1 percent or less of total ad spending.

And in the next four years, the study said, “marketers should increase their investment in mobile to approximately 10 percent.”

“It's clear that marketers are spending significantly less than they should in mobile,” the summary to the study concluded, and by not devoting enough of their media mix to mobile they are “losing out o n sales and profits.”

The study is another example of how much attention is being paid on Madison Avenue to mobile marketing as the media consumption habits and patterns of consumers change quickly. Although many marketers have swiftly been increasing their spending for mobile ads, there is a widespread belief that they are lagging behind the shifts in consumer behavior.

On the other hand, there remain questions about the willingness of American consumers to look at or watch ads on mobile devices. That has been giving marketers pause because they do not want to irk or alienate potential customers.

However, that may be changing. The study found that “when surfing the mobile Web, people expect to see ads,” said Rex Briggs, chief executive at Marketing Evolution, “like when they are surfing a home computer.”

The study advised that for certain types of products like cars, the percentage of ad spending devoted to mobile media could reach as high as 9 percent. For packaged goods and entertainment products, the study said, the percentage could be as low as 5 percent.

The study was not completely positive for mobile media moguls. Mr. Briggs pointed to a finding that more than 90 percent of studies about mobile “exaggerate the impact of mobile advertising” by their methodology.

Those studies are flawed, he said, because they survey only those consumers who click on mobile ads rather than including those who do not click on the ads.

Marketers, media companies and advertising agencies were invited by Marketing Evolution to take part in the analytic process that produced the study as well as to review the recommendations.

Yahoo Fires Bureau Chief After a Live Mic Picked Up His Comments

By BRIAN STELTER

Yahoo on Wednesday said it had fired David Chalian, the Web site's Washington bureau chief, after he was recorded at the Republican National Convention saying that the convention officials were “happy to have a party with black people drowning.”

Yahoo said the reference Mr. Chalian made to the flooding caused by Hurricane Issac was “inappropriate and does not represent the views” of the company. “He has been terminated,” the company said in a statement.

Mr. Chalian did not respond to a request for comment Wednesday.

His “drowning” comment was made on Monday night during Yahoo's live Web video coverage of the convention. The coverage is being produced in partnership with ABC News, where Mr. Chalian worked as political director until 2010. After a little more than a year at PBS's “NewsHour,” he joined Yahoo in late 2011.

The comment was picked up by NewsBuster s, a conservative media watchdog Web site, which posted a short video clip of it on Wednesday morning. Mr. Chalian, who is heard but not seen in the clip, was apparently unaware that his words were being Webcast at the time.

He said to an unidentified guest, “Feel free to say, ‘They're not concerned at all. They are happy to have a party with black people drowning.' ” Laughter could then be heard in the background.

The context of Mr. Chalian's remarks - was he merely goading a guest to say something provocative, or was he expressing his own point of view? - was unclear in the audio clip. NewsBusters said it was a “perfect example of the pervasive anti-Republican bias Mitt Romney faces in his bid to unseat President Barack Obama.”

In its statement, Yahoo said, “We have already reached out to the Romney campaign, and we apologize to Mitt Romney, his staff, their supporters and anyone who was offended.”

JetBlue Sign Joins the New York Skyline

By STUART ELLIOTT

Look, up in the sky. It's a bird. It's a plane. Actually, it's a sign to promote a company that owns a lot of planes.

JetBlue Airways plans to unveil on Wednesday evening a sign atop its headquarters in Long Island City. The sign, which sits on about the 10th story, depicts the airline's logo in 15-foot letters.

The sign was built by the Going Sign Company of Plainview, N.Y. A time-lapse video of the construction can be watched on YouTube. During the day, the sign is to be blue. At night, it will be lit white from within by LED light strips.

The idea that JetBlue could add its name to the New York skyline was a reason the airline decided in 2010 to keep its corporate headquarters in Queens rather than move to Orlando, Fla. JetBlue, which uses the slogan “New York's hometown airline,” had been based in Forest Hills before it moved to Long Island City.

There is to be a ceremony introducing the sign starting at 7:30 p.m. on Wednesday at the JetBlue headquarters, 27-01 Queens Plaza North between 27th and 28th Streets.

Among those scheduled to attend the ceremony are Mayor Michael R. Bloomberg; David Barger, president and chief executive at JetBlue; Senator Charles E. Schumer, Democrat of New York; and Jimmy Van Bramer, a City Council member.

Although the city's two airports are in Queens, many airlines have located signs not in that borough but rather in Manhattan.

The logo of Pan American World Airways was atop the Pan Am Building in Midtown Manhattan for many years. (The MetLife logo replaced it in 1993.) In the 1950s, Trans World Airlines had a colorful neon sign in Times Square. Currently, Times Square is home to the American Airlines Theater.

Housing Market Improvements Lessen Consumer Distress

By ANN CARRNS

Improvement in the nation's housing markets has helped ease consumer financial woes, according to a quarterly report from a large credit counseling agency.

For the first time in nearly four years, the Consumer Distress Index, published by the nonprofit agency CredAbility, showed that  consumers nationally were inching their way out of financial distress.

The index tracks the financial condition of American households by measuring employment, housing, credit, household budget management and net worth. United States households scored a 71.3 on the 100-point index, an increase of 1.4 points from the first quarter. Scores below 70 indicate financial distress. The last time the index topped 70 was in the third quarter of 2008.

Housing was the main driver of consumers' improved financial condition this quarter, according to Mark Cole, the agency's executive vice president and chief operating officer. Late payments on mor tgages reached a three-year low, and housing costs dropped as many homeowners cut their payments by refinancing.

The average household also kept a tighter rein on its budget, which helped drive the savings rate to a one-year high in June. Net worth also ticked up.

The index's unemployment score improved by only a half-point, however, to 59.8 from 59.4, and continued to drag down the index. Although 381,000 jobs were added during the quarter, joblessness remained the same as more people who had given up looking began seeking work again.

Whether the overall gains persist, in light of continued economic uncertainty and the political headwinds of an election year, remains to be seen, Mr. Cole said. “This really is very fragile in nature.”

This quarter's report also includes information on metropolitan areas. Several large areas remain in distress. Orlando, Fla., suffering from both housing woes and stubborn unemployment, i s the most distressed city, followed by Tampa-St. Petersburg in Florida, Riverside-San Bernardino in California, Las Vegas and Miami-Fort Lauderdale. Among the 30 largest metropolitan areas, the healthiest cities are Boston, Washington, D.C., Minneapolis-St. Paul, Dallas-Fort Worth and Denver.

Are you feeling less distressed financially? Why or why not?

In Executive Shakeup, Nickelodeon Fires Its Animation Chief

By BROOKS BARNES

LOS ANGELES â€" Nickelodeon, under pressure to reverse sharp ratings declines, fired its president of animation and longtime head of pre-school programming on Wednesday amid a broader management shakeup.

Brown Johnson, who was responsible for groundbreaking hits like “Blue's Clues” and “Dora the Explorer,” is credited with Nickelodeon's entrance pre-school television, an area that it came to dominate â€" largely because of one of Ms. Johnson's innovations known as “the pause.”

Many of the shows she has helped nurture make use of a choreographed pause during the program, one long enough to let children actively respond to the television, solving puzzles and problems along with the characters, and allowing young viewers to feel like part of the story.

Nickelodeon also re-arranged its executive deck chairs on Wednesday, elevating Russell Hicks to the new position of president of content development and p roduction. Two other executives were given new roles: Margie Cohn will serve in the new role of president of content development; Paula Kaplan will now serve as executive vice president of current series.

The moves centralize animation and live-action programming. What they don't do is add fresh blood to Nickelodeon's management line-up â€" something that some analysts say is crucial to reviving the channel's creative spark and fending off  competition from Disney. Disney recently introduced an entire pre-school channel, with shows like “Doc McStuffins” showing early promise.

Ms. Johnson was based in Burbank, Calif.,and has most recently managed Nickelodeon's impending re-launch of the “Teenage Mutant Ninja Turtles” franchise.

“She leaves an indelible impact on generations of kids for which we will always be incredibly grateful,” Cyma Zarghami, president of the Nickelodeon Group, said in a statement. Of Mr. Hi cks, she said, “Russell will ensure that our rich and diversified development slate, as well as our new and established producing partners, will all serve our creative vision for the network and deliver for our audiences.”

Katy Perry Wants Snackers to \'Dream\' of Popchips

By STUART ELLIOTT

Popchips hopes to put more, well, pop in its chips by adding the pop singer Katy Perry to its roster of celebrity endorsers.

Ms. Perry, known for songs like “California Gurls,” “Firework” and “Teenage Dream,” is also becoming a minority investor in Popchips Inc. as well as a spokeswoman. In those dual roles, she joins stars like Heidi Klum, Ashton Kutcher and Jillian Michaels.

Ads featuring Ms. Perry, created by an agency named Zambezi, are to begin running over the weekend. They feature colorful, portrait-style photographs of her in upbeat poses.

The ads will carry headlines like “Spare me the guilt chip,” “Love. Without the handles” and, accompanying an ad in which Ms. Perry poses with two bags of Popchips in front of her chest, “Nothing fake about 'em.”

The campaign is based “on the bigness and appeal of Katy's personality,” said Chris Raih, managing director at Zambezi in Lo s Angeles. The campaign, with a budget estimated at $2 million, will include the first national print ads for Popchips, to run in magazines like Cosmopolitan, Elle, People, Seventeen and US Weekly.

The national magazine ads reflect the growth of Popchips, said Keith Belling, chief executive at Popchips Inc. in San Francisco, as the brand is sold in the snack aisles of stores like Kroger, Safeway, Target and Walgreens.

There will also be digital banner ads, on Web sites like maxim.com and mtv.com. And there will be posters to appear outdoors and in malls in markets like Boston, Seattle and Toronto.

The arrival of Ms. Perry in the Popchips ads comes four months after the brand suffered a setback with a campaign by Zambezi that featured Mr. Kutcher playing four oddball characters.

Part of the campaign, in which he played an Indian named Raj, was abruptly withdrawn after widespread complaints in social media that his per formance was racist.  As Raj, Mr. Kutcher wore brown makeup and used a sing-song accent.

“We're certainly expecting we won't have the kind of controversy” with the Perry campaign, Mr. Belling said.

Booksellers Group Partners With Canadian E-Book Company

August 29, 2012, 12:42 pm

By JULIE BOSMAN

Nearly five months after Google said it would end a little-used program that allowed independent bookstores to sell its e-books, a Canadian e-reading company named Kobo has stepped in as a replacement.

The American Booksellers Association, a trade group for independents, said on Wednesday that it had formed a partnership with Kobo that would make the company's platform available to bookstores. The partnership will begin with 400 bookstores this fall.

“We are pleased to offer our A.B.A. members a competitive e-book retailing solution uniquely crafted to meet the needs of independent booksellers and their customers,” Oren Teicher, the chief executive of the American Booksellers Association, said in a statement.

“Through this partnership with Kobo,” he said, “indie bookstore customers will have access to a broad and diverse inventory of e-books.  Today's readers want a first-class shopping experience, both in-store and online, and this new partnership allows indie booksellers to meet the ever-changing needs of shoppers in a dynamic marketplace.”

Despite the efforts of booksellers and the prominence of the Google name, few e-books have been sold by participating bookstores in the two years since Google started the program. In April, Google said the program had “not gained the traction that we hoped it would.” It will end in January 2013.

Kobo said it would support the program with in-store merchandising and marketing.

Republican Officials Remove 2 Attendees For \'Deplorable Behavior\' Toward CNN Staffer

August 29, 2012, 12:10 pm

By BRIAN STELTER

Two attendees at the Republican National Convention were removed on Tuesday after they tossed peanuts at a black camera operator and reportedly said, “This is how we feed animals.”

The camera operator was working for CNN, which confirmed in a short statement that “there was an incident directed at an employee inside the Tampa Bay Times Forum,” the site of the convention, on Tuesday afternoon.

“CNN worked with convention officials to address this matter and will have no further comment,” the network said. The remarks were reported by a variety of news organizations, including CNN.com on Wednesday.

The CNN.com post described the incident as “taunting.” It said that “multiple wi tnesses observed the exchange and R.N.C. security and police immediately removed the two people.”

Convention officials said in a statement, “Two attendees tonight exhibited deplorable behavior. Their conduct was inexcusable and unacceptable. This kind of behavior will not be tolerated.” It was not immediately clear whether the attendees were allowed to return.

Through Wednesday morning, CNN had not mentioned the incident on its television channels.

Republican Officials Remove 2 Attendees For \'Deplorable Behavior\' Toward CNN Staffer

August 29, 2012, 12:10 pm

By BRIAN STELTER

Two attendees at the Republican National Convention were removed on Tuesday after they tossed peanuts at a black camera operator and reportedly said, “This is how we feed animals.”

The camera operator was working for CNN, which confirmed in a short statement that “there was an incident directed at an employee inside the Tampa Bay Times Forum,” the site of the convention, on Tuesday afternoon.

“CNN worked with convention officials to address this matter and will have no further comment,” the network said. The remarks were reported by a variety of news organizations, including CNN.com on Wednesday.

The CNN.com post described the incident as “taunting.” It said that “multiple wi tnesses observed the exchange and R.N.C. security and police immediately removed the two people.”

Convention officials said in a statement, “Two attendees tonight exhibited deplorable behavior. Their conduct was inexcusable and unacceptable. This kind of behavior will not be tolerated.” It was not immediately clear whether the attendees were allowed to return.

Through Wednesday morning, CNN had not mentioned the incident on its television channels.

Postponing Retirement Indefinitely

August 29, 2012, 11:07 am

By ANN CARRNS

More than a third of adults near retirement age - 35 percent - said last year that they simply don't expect to retire. That was up from just 29 percent two years earlier.

More than four in 10 of these “pre-retirees” who don't expect to retire say it is because they are financially unable to do so. They cite the need for extra income and the maintenance of employer benefits as the main reasons for continuing to work.

That was among the findings in the “2011 Risks and Process of Retirement Survey Report” from the Society of Actuaries.

“There is a core group of people earning a paycheck who feel, for whatever reason, they aren't going to be able to support themselves in their retirement ye ars,” said Carol Bogosian, an actuary and retirement expert.

The survey was conducted for the society by Mathew Greenwald and Associate and the Employee Benefit Research Institute in July 2011, using telephone interviews of 1,600 adults ages 45 to 80. Half were retirees and half were pre-retirees, who were still working. The margin of sampling error for the survey was plus or minus 4 percentage points.

The findings suggest that Americans need to recalibrate their expectations about how long they can actually work, she said. While many pre-retirees say they expect to continue to work well past traditional retirement age, that may be “wishful thinking” - or an excuse for not saving and preparing, the report says. The reality is that many people actually retire earlier than they expect, whether because they lose their jobs and can't find new ones, or because of failing health.

Half of retirees (51 percent) report that they re tired before age 60. But just one in 10 pre-retirees (12 percent) think they will retire that early. Instead, half of pre-retirees who expect to retire say they will wait at least until age 65.

That gap, combined with the failure of many people to plan for a long enough retirement period, may indicate significant future financial problems for many, Ms. Bogosian notes.

A more realistic plan might be to work two or three years longer than you may originally have expected, to earn additional income and maximize your Social Security income, she said. And workers in their 50s need to think strategically about what skills they need to acquire to keep working longer, whether in their current career or a new line of work.

Are you planning on working longer in retirement? What sort of work do you expect to be doing?

The Breakfast Meeting: More Papers Cut and the Navy Seal Story Leaks Out

August 29, 2012, 10:58 am

By THE EDITORS

Newhouse has ended daily distribution of two more of its newspapers, The Post-Standard in Syracuse, and The Patriot-News in Harrisburg, Pa., which won a Pulitzer Prize this year for its coverage of the Penn State sexual abuse scandal. Both papers will merge their content with Web sites and publish three times a week.

The conservative Web site Judicial Watch obtained documents showing that C.I.A. press officials discussed co-operating with the filmmakers Mark Boal and Kathryn Bigelow on their movie version of the killing of Osama Bin Laden. “I know we don't pick favorites but it makes sense to get behind a winning horse,” wrote one C.I.A. spokeswoman according to the emails. The documents can be found he re.

Marketers are licking their chops for the season kick-off of the National Football League, which has become not just the biggest thing on television but for many advertisers, the most efficient marketing delivery system, as well.

The cable powerhouse ESPN, which already owns its piece of the N.F.L. with its lucrative Monday night broadcasts and its seemingly neverending coverage of the league, doubled down on baseball, as well. The network has extended its deal with Major League Baseball until 2021 for about $700 million a season â€" double what it pays now.

Dutton has decided to move up publication of “No Easy Day” the first-person account of a Navy Seal member who participated in the raid that killed Osama Bin Laden. The publisher, an imprint of Penguin, has also increased the first printing for the book, which is already No. 1 on the bestseller lists of Amazon and Barnes & Noble. The Associated Press obtained an early copy of the book, which sugg ests that Bin Laden did not present an imminent threat when he was killed, contrary to official accounts of the raid.

The New York Times found itself in the news twice Tuesday. First, it was revealed in the documents requested by Judicial Watch that the Times reporter Mark Mazzetti sent an advance copy of a Maureen Dowd column to a C.I.A. spokesperson.

Second, the company announced that Sally Singer, editor of the high-profile fashion magazine T, would be leaving the magazine and the company at the end of the month. The magazine had been struggling to maintain its luxury advertising revenue.

Wednesday Reading: A Great Time to Visit Martha\'s Vineyard

By ANN CARRNS

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.