Pandora Premium comes to the web


Pandora is plugging a hole in its paid subscription service with today’s launch of Pandora Premium on the web. While free users of the radio service could listen to their stations via the browser, oddly, those who pay for an upgraded experience couldn’t play their music on-demand, build playlists, or take advantage of any of the paid-only features.

Not surprisingly, a web experience was the top-requested feature from Pandora Premium subscribers, the company said.

On the new web app, subscribers can search for any track, album, station or playlist and start playing their music on-demand from search results that are personalized based on listening history.

In addition, Premium subscribers are now able to organize favorite songs, albums, stations and playlists in a section called “My Music” for easy access in the future.

The app will also include Pandora’s playlist-building functionality that suggests similar songs to add to a playlist based on what’s just been added.

The launch of Premium on the web comes at a time when Pandora is struggling in the face of fierce competition from top rivals Spotify and Apple Music, as well as Google and Amazon.

The company reported in its Q3 2017 earnings that its Premium subscribers crossed 1 million in October, and it has 5.19 million paying subscribers in total, including its mid-tier product, Pandora Plus. However, its active listeners declined for the third straight quarter, and its ad revenue missed analyst expectations, growing just 1 percent year-over-year to $275.7 million.

Advertising currently makes up the bulk of Pandora’s revenue, as it’s had trouble convincing a larger portion of its overall 73.7 million listeners to upgrade to a paid service. Pandora, after all, is often what people turn to when they don’t want to pay for a music subscription.

In addition, the paid service itself was not feature-compatible with those from competitors, as today’s launch on the web indicates – rival services had already offered access to their premium tier via the desktop for some time.

Pandora is laying off about 5 percent of workforce


Streaming music service Pandora is laying off about five percent of its employee base and taking “other cost-saving measures” in an attempt to save about $45 million annually. According to Pandora’s 8-K filing, employees were notified today of the plan and the company expects the staff reduction to be complete by the end of Q1 2018.

This is all part of an ‘organizational restructuring’ that will shift some resources to ad-tech and audience development. Pandora also announced plans to expand its presence and workforce to Atlanta.

With the expected $45 million in savings, Pandora plans to reinvest that money into ad-tech, non-music content, device integration and marketing technology. While Pandora has laid off some people, it will also hire for new roles.

“As I shared last quarter, we know where and how to invest in order to grow,” Pandora CEO Roger Lynch said in a press release. “We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing. I am confident these changes will enable us to drive revenue and listener growth.”

Spotify is testing a new playlist-based music app that’s a lot like Pandora


Spotify is testing an app that sees it move firmly into Pandora’s territory.

‘Stations’ is a new Android-only app that is being piloted by the company in Australia — it was first noticed by app analytics firm Sensor Tower on Tuesday.

This app offers a ‘lean-back’ option to listen to music based on genres and managed playlists. In the description, Spotify explains that it plays music instantly when opened with stations easily changed by scrolling inside the app. Like Spotify’s core service, there’s a personalization element with user-based playlists created once enough music has been played for it to gather data.

The app has picked up less than 100 downloads to date, while it is limited in its support for Android devices, all of which suggests it has only been used by Spotify’s own staff to date.

“We are always testing new products and experiences, but have no further news to share at this time,” was all that Spotify would tell us when we asked.

The core Spotify product is a subscription-based music, but there is a free version that lets users shuffle through playlists on mobile and is supported by advertising. The theory is that offering a limited version of the product encourages users to sign up for the full product. You’d imagine it could easily do that with this new app, which has a Spotify log-in button but doesn’t require users to be paying members.

With Stations, the company looks like it has taken an alternative approach by creating a standalone app that offers more direct competition to Pandora.

Pandora claims over five million users. It offers premium membership but the bulk of its revenue comes from advertising — $275.7 million of the $378.6 million that it earned in its most recent Q3 period. Late last year, Pandora boosted its money-making potential by adding video advertising to its mix.

Spotify’s exact financial situation is unclear since the company is private, but it is speculated to be planning to go public potentially as soon as this year. The company has been tipped to opt for a ‘direct listing,’ which would mean going public without doing an IPO. In other words, it is just insiders, not the company, that sell shares to the stock market.

The Swedish company seemed to take a step towards going public when it agreed to a share swap with Tencent Music, which is also reportedly planning a listing.

Spotify is testing a new playlist-based music app that’s a lot like Pandora


Spotify is testing an app that sees it move firmly into Pandora’s territory.

‘Stations’ is a new Android-only app that is being piloted by the company in Australia — it was first noticed by app analytics firm Sensor Tower on Tuesday.

This app offers a ‘lean-back’ option to listen to music based on genres and managed playlists. In the description, Spotify explains that it plays music instantly when opened with stations easily changed by scrolling inside the app. Like Spotify’s core service, there’s a personalization element with user-based playlists created once enough music has been played for it to gather data.

The app has picked up less than 100 downloads to date, while it is limited in its support for Android devices, all of which suggests it has only been used by Spotify’s own staff to date.

“We are always testing new products and experiences, but have no further news to share at this time,” was all that Spotify would tell us when we asked.

The core Spotify product is a subscription-based music, but there is a free version that lets users shuffle through playlists on mobile and is supported by advertising. The theory is that offering a limited version of the product encourages users to sign up for the full product. You’d imagine it could easily do that with this new app, which has a Spotify log-in button but doesn’t require users to be paying members.

With Stations, the company looks like it has taken an alternative approach by creating a standalone app that offers more direct competition to Pandora.

Pandora claims over five million users. It offers premium membership but the bulk of its revenue comes from advertising — $275.7 million of the $378.6 million that it earned in its most recent Q3 period. Late last year, Pandora boosted its money-making potential by adding video advertising to its mix.

Spotify’s exact financial situation is unclear since the company is private, but it is speculated to be planning to go public potentially as soon as this year. The company has been tipped to opt for a ‘direct listing,’ which would mean going public without doing an IPO. In other words, it is just insiders, not the company, that sell shares to the stock market.

The Swedish company seemed to take a step towards going public when it agreed to a share swap with Tencent Music, which is also reportedly planning a listing.

Pandora shares down 6% after posting earnings


Music streaming business Pandora reported earnings after the bell on Thursday.

Adjusted earnings per share were negative six cents, better than the negative eight cents that Yahoo Finance analysts were predicting. 

Revenue was $378.6 million, an 8% year-over-year increase from last year.  Yet it’s beneath the $380.57 million that analysts were expecting. Shares quickly dipped nearly 6% in initial after-hours trading.

Advertising accounted for the bulk of Pandora’s revenue and at $275.7 million was a 1% year-over-year increase from last year.

Pandora said that it had an increase in paid subscribers, from 4.01 million in the third quarter of 2016 to 5.19 million in the third quarter of 2017.

“After just a short time here at Pandora, it’s clear to me we have a tremendous opportunity to meet the full spectrum of our listeners’ and advertisers’ needs,” said Roger Lynch, president and CEO of Pandora, in a statement. “We have significant scale, distribution and products that deliver a superior listening experience. We will leverage these strengths to become a more integral part of our listeners’ lives and reinforce our position as the definitive source for audio advertising.”

Lynch just became CEO of Pandora in September. 

Listener hours were down, however. This quarter had 5.15 billion hours listened, compared to 5.40 billion at the same time last year.

Pandora has had a volatile ride on the stock market since it went public in 2011. 

Its challenges are partly due to competition with Spotify and Apple Music. It’s also because it has to pay costly royalty fees.

Pandora closed Thursday at $7.41. The company has a market cap of $1.8 billion.

Pandora made $80M in U.S. app store revenue in Q3, booting Netflix from the top grossing spot


In the face of fierce competition from Spotify and Apple Music, Pandora has been growing its in-app subscription revenues, according to new data from Sensor Tower. The streaming music service earned the number one spot on the chart of top grossing apps in Q3 2017, excluding games. It’s the first time Pandora has held that position since the third quarter of 2015.

Fueling the music app’s rise was this year’s launch of its Premium tier, which arrived in March in invite-only mode before becoming broadly available to users in April.

Pandora Premium is the company’s own take on on-demand music, offering a combination of the radio-like listening Pandora is known for, along with the ability to search out and play tracks on demand and add them to playlists. The service costs $9.99 per month, which is also the going rate for Pandora’s rivals, Spotify and Apple Music.

In addition, Pandora offers a mid-tier service called Pandora Plus, which debuted in fall 2016. For $4.99 per month, users can skip and replay more songs, listen offline, and avoid advertising.

Pandora achieved its ranking as the number one app by revenue in the U.S. in Q3 by grossing $80 million during the quarter.

That pushed it ahead of Netflix, which has held the top ranking on this chart for several quarters. However, Netflix was still the number one app by revenue globally (again, excluding games) in Q3.

Pandora’s $80 million figure also represents 142 percent revenue growth over the same quarter last year, when Pandora’s estimated gross revenue was $35 million.

To be clear, Sensor Tower’s look into app store revenue is only includes in-app spending, which doesn’t paint a picture of Pandora’s business as a whole. In addition to subscriptions, which can also be bought on the web, Pandora has a free tier powered by ads. That business grew its revenue 5 percent year-over-year as of Pandora’s last earnings, while subscription revenue was then up by 25 percent.

Pandora’s earnings reported in July were better than expected, following a quarter that saw a lot of chaos, including the exit of CEO Tim Westergren amid a company shakeup, and the infusion of $480 million from SiriusXM, after Pandora stopped shopping for a buyer.

The company is set to announce earnings today, with new CEO Roger Lynch delving into his plan for Pandora going forward. This may include a stronger focus on Pandora’s radio business, Barron’s reported in an earnings preview.

Analysts are expecting that Pandora lost 8 cents per share in the past quarter on revenue of $380 million, it also said.

The growth in non-game app revenue is not a trend that’s unique to Pandora. Sensor Tower also found that worldwide consumer spend in non-gaming apps increased from approximately $1.7 billion during Q3 2016 across both Google Play and the iOS App Store, to reach $2.8 billion in Q3 2017.

App Annie had also previously reported record app revenue globally. Its total, which includes games, was nearly $17 billion.