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Pandora says iTunes Radio not affecting business, loses nearly 2M active listeners

post #1 of 38
Thread Starter 
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.

iTunes Radio


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.
post #2 of 38
Considering iTunes Radio hasn't been released world wide yet it's probably too soon for pandora to claim a win.
post #3 of 38
Quote:
Originally Posted by darthW View Post

Considering iTunes Radio hasn't been released world wide yet it's probably too soon for pandora to claim a win.

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
post #4 of 38
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.
post #5 of 38
iRadio replaced my Sirius radio in my car, and avoided their subscription charges. I was happy to discover that iRadio worked well with my car's iPod attachment, I'm able to skip songs etc. and see song names on my in dash system. 1smile.gif
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post #6 of 38
Quote:
Originally Posted by AppleInsider 
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?
post #7 of 38
Quote:
Originally Posted by Curtis Hannah View Post

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. 

post #8 of 38
I was very excited for ITunes Radio. I pay for music match so not having commercials was a plus. iTunes Radio has not met the diversity and genre specific playlists expectations. I'm sure it will improve. Overall a lot of the OS7 and iPhone 5s rollout has been less then stupendous. The iPhone 5s has been my best and worst iPhone yet. I have to think its the software.
post #9 of 38
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. It's unfortunate that iTunes Radio can only be run on late model Macs because that's a killer right there. In many ways, Apple is only making it tough for itself to be THE premium subscription service. Of course, I realize Apple has to protect it's iTunes Music purchases and iTunes Radio makes that really easy. So it some ways, iTR can never become as multiple platform-friendly as Pandora. It's fine that Pandora can continue to thrive as long as Apple is also able to make money. I'll bet Microsoft would have gone after Pandora and put it out of business.
post #10 of 38
Quote:
Originally Posted by Curtis Hannah View Post

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.

Probably total increase which isn't much since they change the 40 hour cap rules.
post #11 of 38
BlackBerry said the same thing about the iPhone.
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post #12 of 38

iTunes Radio is Ping to me. Tried it, I just don't get it.

post #13 of 38
Quote:
Originally Posted by bdkennedy1 View Post
 

iTunes Radio is Ping to me. Tried it, I just don't get it.

You listen to music.

What's not to get?

post #14 of 38
Quote:
Originally Posted by snova View Post

BlackBerry said the same thing about the iPhone.

 

Bingo. In 6 months we'll see Pandora's `plans' have either changed or layoffs commencing.

post #15 of 38
I have zero confidence in Pandora's stated outlook.

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.)
post #16 of 38
Doesn't seem like a good time for Pandora right now. They got iTunes Radio attacking from one side and disgruntled musicians on the other side saying that Pandora is taking them for a ride.
post #17 of 38
Quote:
Originally Posted by jfanning View Post


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. 

post #18 of 38
Quote:
Originally Posted by Constable Odo View Post

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.

post #19 of 38
Quote:
Originally Posted by konqerror View Post

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.
It's a new feature, the algorithms will improve as people use the service.

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.
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post #20 of 38
Quote:
Originally Posted by Asrophytum View Post

well, iTunes Radio hasn't been released world wide yet.. o.0

Again, what part of the fact that basically Pandora is only really in the US as well don't you understand?
post #21 of 38
Quote:
Originally Posted by saarek View Post


It's a new feature, the algorithms will improve as people use the service.

 

 

They've got quite a bit of work to do. My own impression from comparing the two is that Apple isn't really trying to compete with Pandora. 

post #22 of 38
Quote:
Originally Posted by konqerror View Post
 

 

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.

 

Do you prefer to listen primarily to singles?

 

I have been very impressed with iTunes Radio in that it doesn't flood my ears with played out singles. Personally, I listen to complete albums and very nearly ignore singles entirely; for some of my albums, I couldn't even tell you which tracks were singles.

post #23 of 38
Quote:
Originally Posted by konqerror View Post

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.
Using the built in training feature (not just skipping) I have found the music selections to be very good.
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post #24 of 38
Quote:
Originally Posted by brutus009 View Post
 

Do you prefer to listen primarily to singles?

 

 

No, I listen to quite a bit of ambient music. iTunes Radio tends to play maybe 4-6 tracks that fall into that category, and then will make an abrupt switch to another music category, like pop. A bit odd, considering that iTunes has a huge ambient music selection. It also tends to repeat ambient tracks that I already own...perhaps 50% or more of what is played. Pandora is currently much better at continuing to play music that matches the initial artist the user selects in my experience.

post #25 of 38
Quote:
Originally Posted by Constable Odo View Post

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. It's unfortunate that iTunes Radio can only be run on late model Macs because that's a killer right there. In many ways, Apple is only making it tough for itself to be THE premium subscription service. Of course, I realize Apple has to protect it's iTunes Music purchases and iTunes Radio makes that really easy. So it some ways, iTR can never become as multiple platform-friendly as Pandora. It's fine that Pandora can continue to thrive as long as Apple is also able to make money. I'll bet Microsoft would have gone after Pandora and put it out of business.

I don't think apple is trying to copy the pandora model at all. ITunes Radio simply exists as a means to get users to buy more music, which is how apple expects to earn, rather than through ads or subscription.

That's why they shouldn't copy their competitors, because their business model is entirely different.
post #26 of 38
Quote:
Originally Posted by mdriftmeyer View Post

Bingo. In 6 months we'll see Pandora's `plans' have either changed or layoffs commencing.
Which would be unfortunate as I think there is a danger in one company (be it MS, Google, FB or Apple) being dominant in so many areas.
post #27 of 38
Quote:
Originally Posted by bloggerblog View Post

iRadio replaced my Sirius radio in my car, and avoided their subscription charges. I was happy to discover that iRadio worked well with my car's iPod attachment, I'm able to skip songs etc. and see song names on my in dash system. 1smile.gif

How much data is that costing you, if you're still on an unlimited plan not much of an issue I guess. I know Pandora have two different streaming rates, 64kbps and 192kbps and if you on the lower rate then 2 hours per day will crew up 2GB in a months and on the higher rate you going to be a lot more so iradio and Pandore do not come cheap, so it is worth not have the standard radio commercials and pay for all the bandwidth data. I have not seen if iradio is offering different bandwidth services.

post #28 of 38
Quote:
Originally Posted by Maestro64 View Post
 

How much data is that costing you, if you're still on an unlimited plan not much of an issue I guess. I know Pandora have two different streaming rates, 64kbps and 192kbps and if you on the lower rate then 2 hours per day will crew up 2GB in a months and on the higher rate you going to be a lot more so iradio and Pandore do not come cheap, so it is worth not have the standard radio commercials and pay for all the bandwidth data. I have not seen if iradio is offering different bandwidth services.

 

That's a good point, luckily I'm still grandfathered on AT&T's Unlimited plan.

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post #29 of 38
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Originally Posted by abazigal View Post


I don't think apple is trying to copy the pandora model at all. ITunes Radio simply exists as a means to get users to buy more music, which is how apple expects to earn, rather than through ads or subscription.

That's why they shouldn't copy their competitors, because their business model is entirely different.

It's true that iRadio gives you the ability to buy songs and albums. But iRadio does have commercials, one every 3 songs or so, and it only allows you to skip 6 songs in an hour.

 

Flo singing Progressive Insurance songs were the only ones I heard so far.

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post #30 of 38

I don't miss Pandora at all and prefer the recommendations I have gotten from iRadio.

 

It could just be my musical choices (70's rock, classical music, guitar and piano soloists), but iRadio doesn't wander too far from my selections, as Pandora did, annoyingly. Yet iRadio has provided enough variation to keep from feeling repetitious. In fact I have already bought more songs thanks to iRadio than I did in my years with Pandora.

 

N=1.

post #31 of 38

iTunes Radio is not very good.  It repeats the same songs, in the same order, as it played the previous hour.  It also stops and asks if you are still listening and want to continue (through AppleTV).  If it continues to repeat the same songs in such a short period of time, you might as well go back to FM radio.  I will use Pandora from now on because of the excessive repeating of songs.

post #32 of 38
Quote:
Originally Posted by ECats View Post

I have zero confidence in Pandora's stated outlook.

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.

 

Makes senses...    we will know in Q1 2014 at earnings.

post #33 of 38

FWIW, my 13yr old daughter is the biggest music listener in our household and she prefers Pandora. 

post #34 of 38
Quote:
Originally Posted by konqerror View Post
 

 

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.


I tried Pandora in its early days - and could never - even with extensive training - get its fabled algorithm to zero in on the music I was after - just bunches of stuff from entirely different eras by artists I'd never heard of and wasn't impressed by. 

 

So at the time I preferred Apple's many existing radio streams from around the world. And Youtube, (even with its super-primitive playlist builder/editors) 'cos I like the visual component - and it's a good date or small group activity..... ...also, automatically tweeting my YouTube plays has made my Twitter account more interesting in terms of generating direct interactions (and spreading my musical tastes). Plus some comment exchanges with some of the (relatively few) non-insane YouTube commenters. :)

And then Spotify came along and I could not only listen to my existing iTunes playlists from my iTunes library, but also listen to whole albums (or mixes of) favorite artists from their catalog - and start a "radio station" from any tune I was playing - which did seem to bring along other fairly-related (to me) music, resulting in new artist discovery, where I could then navigate to the whole catalog of that artist.

I also use the feature that lets me follow what my fb friends are listening to - the "Ping" part that didn't work for Apple.  So no reasons to go back and see what Pandora's been up to since and haven't bothered with the new Apple service yet (if it works on my old desktop in the first place), i.e., I'm good for now.

 


Edited by bigpics - 11/6/13 at 10:58am

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post #35 of 38
Quote:
Originally Posted by saarek View Post

It's a new feature, the algorithms will improve as people use the service.

 

But that's another example of poor service execution on Apple's part. Ideally, you'd make it good, people who install iOS 7 try the new hyped feature, are wowed and Pandora goes bankrupt. Now the situation is that people tried it, thought it wasn't very good, went back to Pandora, and you have to wait until they diffuse back to iTunes Radio once the algorithms improve.

post #36 of 38
Quote:
Originally Posted by konqerror View Post
 

 

But that's another example of poor service execution on Apple's part. Ideally, you'd make it good, people who install iOS 7 try the new hyped feature, are wowed and Pandora goes bankrupt. Now the situation is that people tried it, thought it wasn't very good, went back to Pandora, and you have to wait until they diffuse back to iTunes Radio once the algorithms improve.

you are wrong as can be. Apple has provided an awesome radio service to iTunes users. iRadio is better than pandora. 

 Way better sound quality, excellent selection, awesome "create' function...

Do you think that pandora had a system 1/100th as good as a system when they started? answer is ---- NOOOOOOoooo

And after all this time their sound still sucks ass, and their playlists go off on WHACK tangents.

They will bleed off subscribers as iRadio grows. They will still be around, but they are feeling the pinch already and its only gonna get worse for them. If they could offer a service as nice as iRadio has done right from the start they might stand a better chance on this platform. 

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post #37 of 38
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Originally Posted by snova View Post

BlackBerry said the same thing about the iPhone.

 

BlockBuster said the same...

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post #38 of 38

I think that its too soon in the "game" to determine if apples new radio is going to have an impact on Pandora's share of the market... 

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