On June 9, Pandora Media (NYSE:P) announced its plans to sell its ticket distribution property Ticketfly for $200 million.

In this clip from Industry Focus: Tech, Motley Fool analyst Dylan Lewis and senior tech specialist Evan Niu explain what Ticketfly brought to the table for Pandora, why it sold off the property, how much its losing from the original buy price with this deal, and why this sale might not be the best move for the company's long-term prospects.

A full transcript follows the video.

This video was recorded on June 30, 2017.

Dylan Lewis: I do want to hit that second point of that news, them selling Ticketfly. I have to say, I'm a little bit annoyed about this, because I'm a Pandora shareholder, and frankly I was thinking about getting out of my position right around right before they announced that acquisition. And, I was like, this is really interesting, I want to see what happens here. Just looking at the numbers, first off, they sold it for $200 million, and they paid around $330 million for the property in 2015. The original sticker price was $450 million, but because of the stock side of the deal, it wound up coming in at less. So, they're already eating cost there. And for me, the Ticketfly segment was actually what made them really interesting. You think about the economics of a pure music-streaming business, you're basically working with a commoditized product. Consumers have decided they're paying $10 a month, and all the providers have basically said, "Yeah, that's what we're going to offer it at." So, you don't have any pricing power there. And then, licensing fees eat up a lot of the margins for these companies, and there's not a lot of room to negotiate there. So, you're in two major elements of your business where you don't have a lot of control. The ticketing business is super high margin, and I felt like it fit in so well with their core offering, I'm kind of surprised to see them shutter that side of the business.

Evan Niu: I didn't really follow the Ticketfly deal too closely. I've seen it as it's played out. I remember back then when they announced the deal, thinking, "That does make some strategic sense." Like you mentioned, music streaming, turning that into selling tickets for online shows, that does intuitively make some sense. But, I can also see the case, how it's hard to integrate those together in a seamless way, and maybe that was the problem. It sounds like it fits, but operationally maybe they had a hard time figuring out a good experience to integrate these two aspects. So, maybe they just figured it was too hard and they should focus on shoring up the core business, maybe. It is a weird deal, in more ways than one.

Lewis: And that's what I've heard a little bit of, some rumblings that they were having some technical issues and that it was a little bit of a nightmare in that sense. But, I think it's a little bit frustrating for me, because I see that, Ticketfly's growth wasn't outrageous, but it was a 20%-30% clip year over year, and that's far outpacing what Pandora's core business was doing. So, you have a strong asset that is performing. It's small compared to the revenue base of their subscription and ad businesses, but it's still moving along a lot faster than the rest of it is. So, to give up on that, particularly after paying more than what you wound up selling it for, as a shareholder, I was a little frustrated. And really, I think the motivation, I understand they needed to raise cash, and they have some things that they're going to be chasing in the next year or so, and they want to make sure they have the money on hand to do that. In my mind, it felt like a cut-off-your-nose-to-spite-your-face decision, where they were basically getting rid of this very solid-performing asset to sure up what was going on more short-term with the business. I think, long-term, it might not be the greatest decision.

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