Pandora says iTunes Radio not affecting business, loses nearly 2M active listeners
Pandora's chief financial officer Michael Herring touted the company's resilience in the face of Internet radio newcomer Apple, saying listening hours were up over eight percent in October despite the loss of some 1.8 million active listeners.
While 1.8 million people may sound like a large number, for Pandora, which counted 70.9 million active listeners in October, the fluctuation is in line with the company's forecast for the month, reports Bloomberg.
By comparison, Apple said 11 million people tried out iTunes Radio after it was first deployed. Speaking at the recent iPad event on Oct. 22, chief executive Tim Cook noted that Apple's radio service boasted 20 million users who played a collective 1 billion songs.
As for Pandora, listening hours actually grew 9 percent during the month in which iTunes Radio launched. According to Herring, Pandora's share of the U.S. Internet radio market stood at 8.06 percent at the end of October, up from 7.77 percent the month previous.
"October data was in line with our expectations and showed the resilience of our business," he said.
A number of reasons may be contributing to Pandora's continued growth. In a survey taken in October, 92 percent of iTunes Radio listeners said they still use Pandora. Many reported either going back to the service after trying out Apple's offering, or simply switching off between the two.
Alternatively, listeners may have been swayed by Pandora's decision to lift a 40-hours-per-month listening cap for free users. That change was implemented in September.
Before Apple's iTunes Radio launched on Sept. 18, Herring called the service a "credible threat," but was upbeat about Pandora's continued dominance in the sector.
Pandora is looking to expand operations beyond the U.S., Australia and New Zealand in the near future, and could use some of the nearly $400 million raised in a September stock offering for that purpose. The company is making preparations for international music licensing and royalty agreements, which in some countries call for upfront payments.
Apple's iTunes Radio is currently limited to the U.S., though a recent job listing for a content programmer hinted the service may soon arrive in Canada.
While 1.8 million people may sound like a large number, for Pandora, which counted 70.9 million active listeners in October, the fluctuation is in line with the company's forecast for the month, reports Bloomberg.
By comparison, Apple said 11 million people tried out iTunes Radio after it was first deployed. Speaking at the recent iPad event on Oct. 22, chief executive Tim Cook noted that Apple's radio service boasted 20 million users who played a collective 1 billion songs.
As for Pandora, listening hours actually grew 9 percent during the month in which iTunes Radio launched. According to Herring, Pandora's share of the U.S. Internet radio market stood at 8.06 percent at the end of October, up from 7.77 percent the month previous.
"October data was in line with our expectations and showed the resilience of our business," he said.
A number of reasons may be contributing to Pandora's continued growth. In a survey taken in October, 92 percent of iTunes Radio listeners said they still use Pandora. Many reported either going back to the service after trying out Apple's offering, or simply switching off between the two.
Alternatively, listeners may have been swayed by Pandora's decision to lift a 40-hours-per-month listening cap for free users. That change was implemented in September.
Before Apple's iTunes Radio launched on Sept. 18, Herring called the service a "credible threat," but was upbeat about Pandora's continued dominance in the sector.
Pandora is looking to expand operations beyond the U.S., Australia and New Zealand in the near future, and could use some of the nearly $400 million raised in a September stock offering for that purpose. The company is making preparations for international music licensing and royalty agreements, which in some countries call for upfront payments.
Apple's iTunes Radio is currently limited to the U.S., though a recent job listing for a content programmer hinted the service may soon arrive in Canada.
Comments
Pandora is available in the USA, Australia, and New Zealand. That is hardly world wide.
Plus the combined population of NZ and Aussie is 27 million, that hardly makes a difference compared with the population of the US
A number of reasons may be contributing to Pandora's continued growth. In a survey taken in October, 92 percent of iTunes Radio listeners said theystill use Pandora. Many reported either going back to the service after trying out Apple's offering, or simply switching off between the two.
So how is this growth?
I think a good signal digit percent was lost, but the goal is to stop future increase in listeners, I know I nearly used pandora till I hear about iTunes Radio, are they recieving a loss, yes but minor, but it may prevent future gains, and I wonder if the 8% increase was per person or total.
Chances are that the 1.8 M loss were users that didn't listen much anyway. The occasional users now just use iTunes Radio.
Good point about the future gains. I would also like to see a breakout (you know Pandora has it) of this 1.8 M loss. Is it all or mostly iOS users? Is it across all platforms? Where geographically are these losses coming? Primarily the US?
Would tell us more of the picture. I assume if they noticed an increase in iOS users, they would tout that.
Probably total increase which isn't much since they change the 40 hour cap rules.
iTunes Radio is Ping to me. Tried it, I just don't get it.
iTunes Radio is Ping to me. Tried it, I just don't get it.
You listen to music.
What's not to get?
BlackBerry said the same thing about the iPhone.
Bingo. In 6 months we'll see Pandora's `plans' have either changed or layoffs commencing.
They have lost ~1.8M active users in the last ~49 days, that's an average of 1,500 listeners an hour.
Acting bullish because listening hours have increased after removing the cap on free accounts does not imbue confidence. What it highlights is that they have a problem converting heavy users into paying users.
They must urgently diversify their offering or be submerged by new competitors, Apple's move into Internet Radio will incite many more large players to enter the market.
While I still see Spotify having some of its user base taken, it still has offerings which diversify itself for paying members such as the ability to create and download playlists. (Aka, the subscription model.)
Pandora is available in the USA, Australia, and New Zealand. That is hardly world wide.
Plus the combined population of NZ and Aussie is 27 million, that hardly makes a difference compared with the population of the US
I guess I was part of the people that stopped using it before iTunes radio came out. I don't really listen to it much. Every once in a while I might use iTunes radio, but I usually play my own catalog of music.
Apple's pretty stupid if they can't match Pandora's services. All Apple has to do is copy Pandora's format and offer it for less money.
In my experience, Apple did a poor copy. They managed to miss Pandora's strength which is hardly secret: their song selection algorithms. iTunes Radio, seems to figure out what artists I'm interested in, then promptly plays all their songs which I don't like, skipping over the ones I like, which are often their most popular.
Look on the bright side, at least you get to try the service. The rest of the world has to wait months or years for this as only America is a priority.
Again, what part of the fact that basically Pandora is only really in the US as well don't you understand?