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Pandora completed the acquisition of Ticketfly on October 31, 2015. Ticketfly is a leading live events technology
company that provides ticketing and marketing software and services for venues and event promoters across North America.
Ticketfly's ticketing, digital marketing and analytics software helps promoters book talent, sell tickets and drive in-venue
revenue, while Ticketfly's consumer tools help fans find and purchase tickets to events. Tickets are primarily sold through the
Ticketfly platform but are also sold through other channels such as box offices. For the twelve months ended December 31,
2015, Ticketfly sold approximately 12.5 million tickets, excluding box office sales, to 4.4 million unique ticket buyers to
approximately 90,000 live events, with more than $490 million in gross transaction value, excluding box office sales.
Ticketfly’s operating results are included in Pandora’s operating results only for the final two months of 2015.
Recent Events
Acquisitions
Acquisition of Assets from Rdio, Inc. ("Rdio")
On December 23, 2015, we completed the acquisition of technology and intellectual property from Rdio for $77.5
million, which includes $2.5 million in additional purchase consideration transferred prior to the closing of the acquisition. The
asset sale was administered and approved by the U.S. Bankruptcy Court. Goodwill generated from the assets acquired is
primarily attributable to expected synergies that will allow us to broaden our subscription business and roll out a multi-tier
product offering. We have accounted for this acquisition as a business combination, and the financial results of Rdio are
included in our consolidated financial statements from the date of acquisition. As a result of the sale of assets, Rdio
discontinued its service as of December€22, 2015.
Acquisition of Ticketfly
On October 31, 2015, we completed the acquisition of Ticketfly for an aggregate purchase price of $335.3 million of
common stock and cash, including 11,193,847 shares of the Company’s common stock and approximately $191.5 million in
cash paid by the Company. Goodwill generated from the Ticketfly acquisition is primarily attributable to expected synergies
from future growth and strategic advantages in the ticketing industry. Upon acquisition, Ticketfly became a wholly owned
subsidiary of Pandora. We have accounted for this acquisition as a business combination, and the financial results of Ticketfly
are included in our consolidated financial statements from the date of acquisition.
Acquisition of Next Big Sound, Inc. ("NBS")
On July 1, 2015, we completed the acquisition of NBS. NBS provides analytics for online music, including analyzing the
popularity of musicians in social networks, streaming services and radio. Goodwill generated from the business acquisition is
primarily attributable to expected synergies from future growth and from the potential to expand our Artist Marketing Platform
("AMP"). We have accounted for this acquisition as a business combination, and the results of NBS are included in our
consolidated financial statements from the date of acquisition.
Acquisition of KXMZ-FM
In June 2013, we entered into an agreement to purchase the assets of KXMZ-FM. The Federal Communications
Commission ("FCC") approved the transfer of the FCC licenses and the acquisition was completed in June 2015. We have
accounted for this acquisition as a business combination in the twelve months ended December 31, 2015. The results of
KXMZ-FM are included in our consolidated financial statements from the date of acquisition, but were not material to our
operating results or consolidated balance sheets.
Music Royalty Matters
Copyright Royalty Board ("CRB") Ruling
On December 16, 2015, the CRB announced the new per performance rates that apply for commercial webcasters for
calendar years 2016 through 2020 (the “Web IV Proceedings”). The rates and terms take effect€January 1, 2016€and represent
an approximate 15% increase over Pandora’s 2015 effective per-performance royalty rate based on Pandora’s projected blended
rate for subscription and non-subscription performances in 2016. Unlike the royalty structure applicable prior to 2016, the Web
IV rates do not include an alternative calculation based on percentage of revenue, but instead are solely based on per-
performance rates. The rates for the calendar years 2017 through 2020 will be adjusted by the CRB to reflect the increases or
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