Pandora to lift monthly free listening limit ahead of Apple's launch of iTunes Radio
As Apple prepares to launch its iTunes Radio service for iOS 7, Mac and PC, popular Internet radio service Pandora is making moves to ensure that the iPhone maker doesn't crowd it out of the segment.
On Sept. 1, Pandora will lift the 40-hour-per-month limit the company has had in place on free mobile listening since March of this year, the radio service announced on Thursday. Speaking during the company's quarterly conference call, Pandora CFO Mike Herring attributed the decision to improvements in Pandora's advertising business, as well as the development of "surgical techniques" such as skip limits.
"Our investment in advertising infrastructure and implementing smart levers such as reducing song skipping and limiting mobile listening," Herring said, "have helped us drive monetization and manage content costs, as reflected by the increase in RPM and a decrease in content costs as a percentage of revenue.
"When we introduced the 40 hour mobile listening limit, we were confident that our scale ? over seven percent of total radio listening and Pandora's number one ranking in most major markets ? would allow us to take this action without impacting our key monetization initiatives in driving the disruption of the radio advertising market and driving our mobile advertising leadership."
Thursday's announcement marks the second time that Pandora has put a free listening cap in place and then lifted it. The last cap lift occurred in September 2011.
Pandora is the largest radio station in nearly every major market in America. The service is available on more than 1,000 consumer electronic devices, and roughly one-third of all new cars sold in the United States in 2013 will have access to Pandora. The service is also the third-largest generator of mobile ad revenue, following Google and Facebook.
Even while it has struggled to control music royalty expenditures, Pandora has grown to become a powerful name in the digital music business. The streaming industry has grown increasingly crowded, though, as massive tech companies ? including Google and Microsoft ? have made plays to bring their own streaming services online.
Most recently, Apple announced that it would join the fray, bringing iTunes Radio to devices running iOS 7, Macs, PCs, and Apple TV devices. Apple's option will likely launch alongside iOS 7 some time in September.
Apple's model has already been established as a threat to Pandora, given that it will be built in to all of Apple's devices and will likely feature the sort of functionality that only comes with such deep integration. iTunes Radio has already begun attracting ad buys from major brands like McDonald's, Nissan, and Pepsi.
On Sept. 1, Pandora will lift the 40-hour-per-month limit the company has had in place on free mobile listening since March of this year, the radio service announced on Thursday. Speaking during the company's quarterly conference call, Pandora CFO Mike Herring attributed the decision to improvements in Pandora's advertising business, as well as the development of "surgical techniques" such as skip limits.
"Our investment in advertising infrastructure and implementing smart levers such as reducing song skipping and limiting mobile listening," Herring said, "have helped us drive monetization and manage content costs, as reflected by the increase in RPM and a decrease in content costs as a percentage of revenue.
"When we introduced the 40 hour mobile listening limit, we were confident that our scale ? over seven percent of total radio listening and Pandora's number one ranking in most major markets ? would allow us to take this action without impacting our key monetization initiatives in driving the disruption of the radio advertising market and driving our mobile advertising leadership."
Thursday's announcement marks the second time that Pandora has put a free listening cap in place and then lifted it. The last cap lift occurred in September 2011.
Pandora is the largest radio station in nearly every major market in America. The service is available on more than 1,000 consumer electronic devices, and roughly one-third of all new cars sold in the United States in 2013 will have access to Pandora. The service is also the third-largest generator of mobile ad revenue, following Google and Facebook.
Even while it has struggled to control music royalty expenditures, Pandora has grown to become a powerful name in the digital music business. The streaming industry has grown increasingly crowded, though, as massive tech companies ? including Google and Microsoft ? have made plays to bring their own streaming services online.
Most recently, Apple announced that it would join the fray, bringing iTunes Radio to devices running iOS 7, Macs, PCs, and Apple TV devices. Apple's option will likely launch alongside iOS 7 some time in September.
Apple's model has already been established as a threat to Pandora, given that it will be built in to all of Apple's devices and will likely feature the sort of functionality that only comes with such deep integration. iTunes Radio has already begun attracting ad buys from major brands like McDonald's, Nissan, and Pepsi.
Comments
Competition at its best!
Way to make everyone aware of iTunes Radio's better terms ahead of launch, Pandora. Streisand Effect much?
Short the stock.
Quote:
Originally Posted by rgfsteed
Who cares? Unless you live in the USA, Australia or New Zealand, Pandora is a nonstarter.
Well, yeah. But to be honest, unless you live in the USA... so is iTunes Radio.
iTunes Radio via iTunes Match FTW.
Buh-bye, Pandora.
Do we know that to be true yet?
I would assume iTunes radio will be ready in more markets than just the US market at launch
Quote:
Originally Posted by blackbook
Do we know that to be true yet?
I would assume iTunes radio will be ready in more markets than just the US market at launch
Well... that's all I know.
Quote:
Originally Posted by dreyfus2
Well... that's all I know.
I'm sure it will still have a pretty quick international rollout, just as Siri did.
Quote:
Originally Posted by blackbook
I'm sure it will still have a pretty quick international rollout, just as Siri did.
Well, Siri was not depended on licensing deals with the music industry. I am, of course, all for it rolling out quickly, but considering that we here do still wait for the ability to re-download movies and tv shows, as Apple can't reach a deal with content providers in Germany... I do not take it for granted.
Quote:
Originally Posted by dreyfus2
Well, Siri was not depended on licensing deals with the music industry. I am, of course, all for it rolling out quickly, but considering that we here do still wait for the ability to re-download movies and tv shows, as Apple can't reach a deal with content providers in Germany... I do not take it for granted.
If internet radio is available anywhere in the world where you can get a broadband connection, why do you think this should be an issue?
True but I'm at least hoping for it to work in as many countries as pandora at a minimum at launch. Considering Apple's deal is more profitable for music companies I think many may see the value in opening up their content to iTunes radio
Quote:
Originally Posted by anantksundaram
If internet radio is available anywhere in the world where you can get a broadband connection, why do you think this should be an issue?
Because of this?
All streaming services are contractually forced to check the IP address and deny service if the user is located in a locale for which no licensing agreements exist.
Quote:
Originally Posted by dreyfus2
Because of this?
All streaming services are contractually forced to check the IP address and deny service if the user is located in a locale for which no licensing agreements exist.
I travel frequently around the globe and get around this by using VPN tunnel to my network.
Quote:
Originally Posted by RKRick
I travel frequently around the globe and get around this by using VPN tunnel to my network.
Yeah, that works because your network is in the US. For anybody not having a network in the US, it won't make a difference. One could try some US proxy servers, but I have tried a few of those and they seem to be blacklisted as well (and even if they would work, I would not be sure that the performance would be great).
Don't you think Pandora would reduce there impact amongst iOS users ? They still have the Android market unless OEM's come out with similar radio services like iTunes Radio.
No the contract doesn't say u need to check IP address. They just need to ensure the music is available to the US and select other few countries market. In order to comply with that requirement the technology provider choose a technical method to do so.
Pandora relied on IP address which can easily be beaten with proxies.
Apple however relies on the fact that u have a US based Apple account and not IP filtering to make the service available. That is neither a fool proof solution.