While radio companies report relatively flat growth, the elephant trying to nudge into the radio room, continues to grow revenue and grow listeners. And while some may dispute whether Pandora's 6% share of total audio listening is real or relevant, and whether a few hundred million dollars makes much of a difference to a multi-billion industry, the fact is Pandora is growing and radio is not.
The latest swipe at the Pandora business model is that it will not hold up from the weight of the performance fees. Time will tell, but it's hard to ignore the numbers. Hundreds of millions of dollars, while a small percentage, are coming from somewhere. In the quarter that just ended Pandora's revenue was $80.8 million a 58% jump over the same quarter a year ago. The radio industry reported Q1 revenue for radio was up 1%. And don't forget more automobiles are coming to market with Pandora as an option on the dash. In fact, it's becoming a promotional highlight for car companies. (The battle for the Dashboard is a key topic at Convergence 12 in June)
Breaking down the quarterly revenue numbers, advertising revenue was $70.6 million, a 62% year-over-year increase. Subscription and other revenue was $10.2 million, a 38% year-over-year increase. Pandora reported total listener hours grew 92% to approximately 3.09 billion for the first quarter of fiscal 2013, compared to approximately 1.6 billion for the first quarter of fiscal 2012. 2Q13 And, Pandora gave guidance for the next quarter and the year. Revenue is expected to be in the range of $99 million to $101 million. Fiscal 2013 Guidance: Revenue is expected to be in the range of $420 million to $427million. Typically a radio company does not give much guidance, certainly not as specific as these numbers, citing lack of visibility and an uncertain economy.
(5/25/2012 7:49:21 AM)
For our small station, Im not concerned about Pandora. Why? Well I dont think Pandora will be broadcast all of the high school sports games, or have local news and obits(yes we still do that), our local polka show(with a well know local band leader) has a better variety than Pandora, Im doubting Pandora will be broadcasting from our local dairy breakfast, fair, and other local events. Yes Pandora is increasing its revenue, but there are still things our station can do that Pandora cant.
(5/24/2012 1:41:28 PM)
I am still struck by the fact that Pandora continues to lose more and more money each quarter. Their expenses continue to go up faster than their revenues. Mobile ads are less valuable and harder to sell and that is where there growing audience lies. Every new listener increases their expenses and at the same time makes their inventory less valuable because more and more of it is being created. Adding to all of that, there is a new rate setting proceeding coming up and SoundExchange and the record labels are not likely going to agree to reduce rates to keep Pandora afloat. I like the product, but how long can they continue to lose money and still stay in business.
(5/24/2012 9:31:18 AM)
Enough. It is time to rename your publication Pandora Ink.
(5/24/2012 8:15:56 AM)
I'll always remember the first time I bought my wife a bouquet of helium-filled latex balloons. God, they were beautiful! When I woke up the next morning and came downstairs, the balloons had descended from their ceiling kiss and were now dancing just a few inches from the floor. We all know the answer to how that happened. Word to the wise: Take the external threat represented by Pandora seriously. We've seen this slow leak of revenue and relevance before (remember that trendy little nothing called digital?). Popeye used to say, "If you can't beats 'em, join 'em!" The biggest radio groups have the core assets to compete. Let's not whine about the competition. Let's just do our thing better!
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