8/23/13: Pandora usage and earnings soar, but losses widen in second quarter

Paul Maloney
August 23, 2013 - 2:25pm

Webcaster Pandora reported record earnings yesterday for its second quarter, $162 million (up 58% from a year ago). Executives say the growth was driven by mobile -- its total mobile revenue went up 92% year-over-year to $116.0 million. Pandora -- says eMarketer -- is now behind only Google and Facebook as the third largest generator of mobile ad revenue. Total ad revenue was $128.5 million, a 44% increase. And local sales quadrupled in 2Q over last year.

Over the last quarter, listeners tuned in for 3.88 billion hours, giving Pandora a 7.08% share of all radio listening in the U.S. The service now has 71.2 million regular users.

"Pandora has quickly become the largest radio station in nearly every major market in America," CFO Mike Herring told analysts on the earnings call.

Positive earnings and usage growth were apparently overshadowed by Pandora's widened second-quarter loss, and the webcaster's narrowed guidance for third-quarter earnings. Pandora stock fell in after-hours trading.

Read Pandora's press release here, and excellent coverage from Tom Taylor Now here.

Paul Maloney
August 23, 2013 - 2:25pm

Pandora will lift the 40-hour/month limit on ad-supported mobile listening, it announced yesterday, but also limit the number of songs these users can skip, as a way to manage royalty costs.

These announcements came along with the company's second quarter earnings and usage reports (see today's top story here).

Since March, Pandora has limited listeners of its free streaming service to 40 hours per month on mobile (listeners could purchase additional listening for the month). Beginning in September, that limit will lifted. Paraphrasing CFO Michael Herring from the earnings call, CNet reports Pandora will use "tools like skip limits and other measures" to "manage Pandora listening patterns much more closely than the 'blunt tool' of a cap did." Those other tools include "a newly announced 'sleep timer,'" says The Wall Street Journal, "that users can program to freeze the service after they fall asleep."

Tom Taylor reports you can also expect more ads on the Pandora free service. Limited to between 3 and 4 per hour in the past, Pandora plans to go up to 5 commercial units (perhaps as much as 3 minutes of commercials) per hour, with some "stop sets" including more than one spot back to back.

One last interesting note from Tom's coverage: Pandora announced it paid $8 million to Yahoo for patents related to the now-defunct Launch Media service, which should help protect it in potential intellectual property disputes.

Read more from Pandora here, from CNet here, from The Wall Street Journal here, and once again, Tom Taylor Now here.

Paul Maloney
August 23, 2013 - 2:25pm

Jacobs Media has revealed what it found when it studied the digital media habits of public radio listeners earlier this year. Here are some of the quick takeaways:

  • 16% of weekly public radio consumption is on digital (Internet and mobile) channels.
  • Public radio listeners of all ages are becoming more reliant on mobile (phones, tablets, and even connected dashboards) technology. Half have a tablet, nearly two-thirds text, and nearly all have a mobile phone.
  • Listeners' use of social media, texting, mobile devices, and streaming all continute to grow.
  • More than half can now connect their iPod or phone to their car.

See the full size graphs of Jacobs' findings here.