Pandora’s Growing Audience and Revenue

Pandora updated its SEC filing last week to give us a glimpse of what’s been going on in 2011. Impressive growth continues to be the story. In the 3 month period ended April 30th they added 1.6 billion listener hours and another 14 million registered users. Of those 94 million registered users, 34 million are active users who have “requested audio from our servers within the trailing 30 days to the end of the final calendar month of the period.”

Last year Pandora streamed 3.2 billion listener hours of programming, in the first quarter of this year they streamed 1.6 billion. Their listener hours are up 129% over a year ago. Those additional hours are not just coming from new listeners. Registered users and Active users are up (77% and 89%), but not by as great a margin, meaning that listeners are listening to the service longer than they were a year ago.

Pandora seems to be having no trouble finding demand for their inventory, which they are growing at an extraordinary pace. Pandora made $137,764 million in their fiscal year that ended at the end of January. They added more than $47 million of that in their final quarter (November – January). In the first quarter of this year, which for them is February – April, they added $51 million. Revenue from subscriptions was 15.4% last year, and is 16.9% for first quarter.

More and more listeners are accessing Pandora on mobile devices – in the recent quarter 60.3% of their audience came over mobile devices. Check out this trajectory – listener hours on mobile devices constituted approximately 4.6%, 23.5%, 50.5% and 60.3% of their total listener hours for fiscal years 2009, 2010 and 2011 and the three months ended April 30, 2011, respectively.

On the expense side the pace is stiff as well – Pandora’s licensing obligations tore more than $29 million out of the $51 million the company brought in in the new quarter. Billboard notes that the challenge for them will be to increase their ability to monetize every listener hour, which is a challenge given the rapid rate at which they are growing listener hours at this point.

There’s no doubt about it, Pandora’s growth is impressive. I’m delighted to watch it..

2 responses

  1. how come u didnt report they actually ‘again’ made a loss?

  2. Jennifer Lane

    Hi Doug,
    I’m not as fixated on Pandora’s ability to make a profit at this moment. They are growing audience and revenue, as well as expenses rapidly at this point, and I believe that will eventually translate to an ability to exceed expenses with revenue and drive a profit. No doubt, their “experiment” is one many others can observe and learn from. Thanks for reading!

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