Pandora hosted a 2Q earnings call last week, giving investors news of increased listening and revenues, and continued disappointing profits. The highlight of the call was the news that mobile ad revenues are up 92% over last year, with Pandora now claiming to be the third largest generator of mobile ad revenues in the US, behind Google and Facebook.
Other big news included the fact that just months after a move to cap listening at 40 hours per month, Pandora is removing that cap. No doubt, this decision has to do with the impact that move had – Pandora’s numbers dipped about 10% this spring after the cap was instituted, and at least one competitor, Slacker, saw simultaneous growth. Meanwhile, it did appear that the cap spurred subscription sales as well – although whether those subscribers will stick now that the cap is lifted remains to be seen. Non-GAAP subscription and other revenue was $33.5 million for the quarter, a 153% year-over-year increase, including $4.7 million in revenue relating to our subscription return reserve which has to be held separately since they collect the fees upfront, but subscribers may cancel for a refund.
Advertising revenue was $128.5 million, a 44% year-over-year increase for the quarter.
Pandora also announced that they will for the first time be running back to back ads in listener’s streams, increasing the potential number of ads a listener can hear from about 4 per hour to 5. Since these are mainly 30 second ads, the ad minutes may climb to 3 minutes per hour.
My take on the listener hour cap and commercial units per hour tweaking is that Pandora is growing up and turning its attention more to profitability. They’re demonstrating a willingness to try different things in their attempt to make money per listener. The fact that they are connected to identified listeners gives them the ability to watch their tweaks closely, and they are obviously not afraid to change course if they don’t like what they see. And since they are a public company, these are experiments that the entire industry can watch and learn from..
Are you coming to RAIN Summit Orlando on Tuesday September 17th? Join attendees and speakers from Pandora, Slacker, iHeartRadio, TuneIn, Spotify, Univision, Greater Media and so many more for a great conference with excellent panels and networking. Click here to register, and use the code Audio4cast to save a bit.
- Pandora Shows That A Media Business Can Grow Around Mobile Ads (businessinsider.com)
- Pandora scraps 40-hour mobile limit ahead of iTunes Radio launch (digitaltrends.com)
Muve Music, a music subscription service that is a division of Cricket Wireless, recently announced that they have more than a million subscribers in the US. Cricket sells prepaid, no contract wireless service for smartphones and cellphones.
The million mark for subscribers in the US is a number that in the past year Spotify and Rhapsody have mentioned as well. Other subscription services that are a factor are Pandora, with their Pandora One service, MOG and Rdio. No one really knows how big those services are, although I’d guess that Pandora One is well over a million, and MOG and Rdio are under. Sirius XM also sells subscriptions as add-ons to their satellite music customer base.
According to a recently released annual study of music sales by IFPI, the number of people paying to use subscription services grew 44 per cent in 2012 to 20 million globally. Subscription revenues are expected to account for more than 10 per cent of digital revenues for the first time in 2012. (again, that’s a global report). Subscription services are credited with replacing illegal download activity, and also with replacing music download sales.
With several services in the US hitting the million subscriber mark and subscription based revenues projected to make up 10% of digital revenues for the music industry, it’s certainly become a viable business model for streaming. The upcoming RAIN Summit in Las Vegas on Sunday April 7th will feature several speakers from subscription based streaming services, including Rhapsody CEO Jon Irwin, who will deliver a keynote speech. Speakers from SiriusXM and Spotify will join panels as well.
For more information on RAIN Summit West and to register, click here. See you there!
Entries are now being accepted for the RAIN Internet Radio Awards. The third annual awards will recognize excellence in online radio in four categories which have been defined to give all stations, big and small, broadcaster and pureplay, a chance.
- Best Overall Online Radio Service
- Best Streaming Broadcast Station
- Best Overall Digital Strategy
- Best Single-Stream Webcaster
The RAIN Internet radio awards are the awards for our industry, designed to search for and celebrate excellence. Winners get bragging rights for a year.
The awards will be presented on Tuesday September 18th at RAIN Summit Dallas, and while you do not have to be present to win, we certainly hope you will be there.
You can enter the RAIN Internet radio awards for free by simply answering a few questions about your station.
Celebrate innovation and excellence by entering the awards today. For more information click here.
Targetspot has released a new whitepaper that examines the behavior of digital audio listeners with regard to discovering new music, giving and receiving musical recommendations, and music purchasing.
The paper points out that Internet radio listeners are an engaged bunch, 80% listen 1-3 hours a day. What’s more, 73% listen to more than one station a day and 46% often check out the name of the song or artist playing.
Other indicators of the level of engagement with new music that Internet radio listeners have include:
- 69% of Internet radio listeners have decided to purchase a song as a result of hearing it on an Internet radio station.
- 42% rate songs on Internet radio stations
- 38% recommend songs, artists or stations
- 32% check out what others are listening to online
- 57% search for new music
- 28% click on ads
- 32% buy songs online
- 22% buy albums online
Internet radio passionistas will convene at RAIN Summit West on April 11th during NAB Show week in Las Vegas at the Renaissance Hotel.
RAIN Summits are the premiere educational and networking events for Internet radio, and this 9th annual event in Vegas promises to be the best yet. Panels such as Compelling Content, What’s Driving Internet Radio, Legal Update, Upward Mobility and others will cover topics ranging from growing your audience to avoiding legal pitfalls, mobile and in-car streaming, and more.
Speakers will include execs from CBSRadio, Pandora, Emmis, AOL Radio, SomaFM, Digitally Imported, Cox, Katz360, Targetspot, Triton Digital and many many more. Don’t miss this excellent opportunity to listen and network with some of the smartest folks in the business.
RAIN: Radio and Internet Newsletter Publisher Kurt Hanson will present his annual Future of Radio speech. Registration includes the full day agenda plus lunch and the end of the day cocktail party by the pool.
For more information and to register, click here. See you there!
There were many highlights in the full day of programming presented at RAIN Summit West last monday during the NAB Show in Las Vegas. Two research studies were presented that provided excellent data on Internet radio and digital audio’s growing audience.
Radio Futures 2010 is an independantly funded study on audio platforms and usage in the US, UK and Canada done by Vision Critical. Senior VP and Managing Director Jeff Vidler presented the study, which makes a strong case for the future of Internet radio in the US. Nearly a quarter of the respondents (22%) indicated that Internet radio is playing a bigger role in their lives in the past couple of years.
When asked to list the features of online services that are most appealing to them, 53% said streaming songs on demand was most important, followed by radio with customizable features such as selecting and deselecting artists. Radio that streams music mixes designed by music experts was the least popular feature with listeners.
Also of interest, smartphone users are more likely to use a web based app to listen on their device than a broadcast service on the same device. 31% of smartphone users in the US listened on a web only app, while only 19% tuned in with a broadcast radio app on their smartphone, causing the study to conclude that IP delivery is a preferred audio platform for mobile smartphone users.
RAIN: Radio and Internet Newsletter has announced dates for two exciting, informative and prestigious industry events. On March 12th in Toronto during Canadian Music Week, RAIN will host its first Canadian RAIN Summit, featuring interesting speakers and topics related to Internet radio both in Canada and the United States.
On April 12th, RAIN will host its annual flagship event at the Renaissance Hotel in Las Vegas. This event takes place during and is an official co-located event of the NAB Show. It’s the premiere educational and networking event for Internet radio. Broadcast radio executives, Internet radio entrepreneurs, and sales and technology visionaries convene at the Renaissance Hotel adjacent to the Las Vegas Convention Center for engaging panels and presentations on technical and legal aspects of the business, programming expertise and business strategies. All RAIN Summit registrants will also receive access to the 2010 NAB Show exhibits.
Join RAIN publisher Kurt Hanson and a slate of industry leaders for a full day of information and networking in Las Vegas, or an afternoon’s worth in Toronto – or both! Then end the day socializing with other broadcasters and webcasters at the famous RAIN Summit cocktail party.