Personal radio service Pandora announced its latest financial results last night, reporting revenues of $194.3m for the first quarter of 2014, up 69% year-on-year.

That included $147m of revenues from its mobile business, which thus now accounts for 76% of the company’s income. Pandora generated 4.8bn listener hours for the quarter – up 12.7% – and ended Match with 75.3m active listeners.

Ad revenues were up 45% to $140.6m for the quarter, yet all of this isn’t enough to send Pandora into the black: the company reported a net loss of $28.9m, although that’s at least narrowed from the $38.7m loss in Q1 2013.

CEO Brian McAndrews talked up user growth in the company’s analyst call: March saw Pandora’s first ever week with more than 25m active users every weekday, and in March each active user averaged 21.9 hours of listening. Pandora also has more than 5m unique users listening through its car integrations.

CFO Mike Herring also talked through Pandora’s decision to increase the cost of its Pandora One subscription from $3.99 a month to $4.99 a month, noting that Pandora’s content costs have increased by 53% over the last five years.

There wasn’t much to add on the recent lawsuits from major labels over the lack of royalties paid by Pandora for tracks recorded before 1972, although McAndrews said that such songs account for around 5% of total plays on Pandora, and stressed that the company does pay publishing royalties for those songs.

“We’re confident in Pandora’s legal position on this issue,” he said. There was also an insight into how Pandora is doing outside the US, with McAndrews saying the company now has “well over 1m registered users” in Australia and New Zealand – although that’s still a drop in the ocean of its 250m total registered users.

Even so, Pandora remains in a challenging position in 2014. Partly because it remains under fire from publishers, labels, artists and songwriters alike over different aspects of its royalty payouts; partly with the prospect of continued competition from iTunes Radio and the radio aspects of on-demand services like Spotify; and partly due to that ongoing question of whether it can build a profitable business from streaming music.

It’s notable how Pandora’s content acquisition costs as a percentage of overall revenues has shrunk: 74.5% of its revenues in Q1 2013 went on royalties, versus 55.7% in Q1 2014. The company is forecasting a profit for its next full financial year, but that in itself may bring more criticism of its drive to lower royalty commitments.

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