Personal radio service Pandora’s revenues were up 58% year-on-year to $80.8m in Q1 2012 according to its latest financials, but its net loss grew from $6.7m to $20.2m in the same period. A key reason is rising costs: revenues may have risen by 58% in the last year, but Pandora’s ‘content acquisition’ costs rose 91% to $55.8m in the same period.
Pandora’s growth continues: 51.9m active users by the end of Q1 who listened for 3.1bn hours in the quarter – up 53% and 92% respectively year-on-year. But the company faces the same challenge as Facebook – how to make more money from its rocketing usage on mobile devices – with the added challenge of its royalty-payments responsibilities.
70% of Pandora listening is on mobile devices – and that figure continues to trend upwards according to CEO Joe Kennedy in the company’s analyst call last night. “Pandora today monetises desktop usage at a significantly higher level than we do usage on mobile and other connected devices,” he admitted. Pandora needs to get on top of this challenge ahead of the next royalty arbitration process, which kicks off in 2014.