Pandora 2012 Annual Report Download - page 35

Table of Contents
We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and
successfully grow our business could be harmed.
We believe that our future success is highly dependent on the contributions of our executive officers as well as our ability to attract and retain highly
skilled and experienced sales, technical and other personnel. All of our employees, including our executive officers, are free to terminate their employment
relationship with us at any time, and their knowledge of our business and industry may be difficult to replace. Qualified individuals are in high demand,
particularly in the digital media industry, and we may incur significant costs to attract them. In addition, competition for qualified personnel is particularly
intense in the San Francisco Bay Area, where our headquarters are located. If we are unable to attract and retain our executive officers and key employees, we
may not be able to achieve our strategic objectives, and our business could be harmed. In addition, we believe that our key executives have developed highly
successful and effective working relationships. If one or more of these individuals leave, we may not be able to fully integrate new executives or replicate the
current dynamic and working relationships that have developed among our executive officers and other key personnel, and our operations could suffer.
Interruptions or delays in service arising from our own systems or from our third-party vendors could impair the delivery of our service and harm our
business.
We rely on systems housed in our own facilities and upon third-party vendors, including bandwidth providers and data center facilities located in
California and Virginia, to enable listeners to receive our content in a dependable, timely, and efficient manner. We have experienced and expect to continue
to experience periodic service interruptions and delays involving our own systems and those of our third-party vendors. We do not currently maintain a live
fail-over capability that would allow us to switch our streaming operations from one facility to another in the event of a service outage. Both our own facilities
and those of our third-party vendors are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and
similar events. They also are subject to break-ins, sabotage, intentional acts of vandalism, the failure of physical, administrative, technical and cyber security
measures, terrorist acts, natural disasters, human error, the financial insolvency of our third-party vendors and other unanticipated problems or events. The
occurrence of any of these events could result in interruptions in our service and to unauthorized access to, or alteration of, the content and data contained on
our systems and that these third-party vendors store and deliver on our behalf.
We exercise no control over our third-party vendors, which makes us vulnerable to any errors, interruptions, or delays in their operations. Any
disruption in the services provided by these vendors could have significant adverse impacts on our business reputation, customer relations and operating
results. Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a
timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could
subject us to operational delays and inefficiencies until the transition is complete.
Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.
Our revenue and operating results could vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are
outside our control. As a result, comparing our operating results on a period to period basis may not be meaningful. In addition to other risk factors discussed
in this "Risk Factors" section, factors that may contribute to the variability of our quarterly and annual results include:
• our ability to retain our current listenership, build our listener base and increase listener hours;
• our ability to more effectively monetize mobile listener hours, particularly as the number of listener hours on mobile devices grow;
• our ability to attract and retain existing advertisers and prove that our advertising products are effective enough to justify a pricing structure that
is profitable for us;
• our ability to effectively manage our growth;
• our ability to continue to operate under the statutory licenses set forth in the DMCA and DPRA.
• our ability to enjoy the benefit of rates negotiated below those established by the CRB in 2007;
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