Pandora reports Q3 financials, November listening figures

Paul Maloney
December 5, 2012 - 12:20pm

Pandora revealed its third quarter financial figures yesterday, and can now say growth in mobile revenues have caught (and is outpacing) growth of its mobile audience.

[We reported this week that comScore figures show Pandora, with 77% of its total listening hours now from mobile, is the Internet's most "mobile-centric" company here.]

And while earnings (as well as audience growth -- Pandora reports 3Q13 total listener hours of 3.56 billion, up 67% year-over-year; with 59.2 million "active users," up 47% year-over-year) appear quite healthy, Pandora's stock dropped once again in after-hours trading, as the service battles with the music industry to secure a more favorable royalty structure.

For the three months ending October 31, 2012 (Pandora's fiscal 2013 third-quarter), Pandora made $120 million ($106.3 million from advertising; $13.7 million from subscriptions -- both up from last year). While that's up 60% from the same period last year, the company's "content acquisition costs" (aka royalties) rose 75%.

As mentioned, the gem in its revenue news is mobile. Pandora reports 3Q13 total mobile revenue of $73.9 million, 112% growth year-over-year. It was at the end of this time period that the service launched Pandora 4.0, its most significant mobile app redesign ever (here). The aim, of course, is that by enhancing the usability of the app, and increasing the value of interacting with it, it also increases the value of accompanying advertising.

Pandora now says it employs sales managers in 27 of the country's top 40 radio markets, and has local account execs on the street in 17. Pandora CEO Joe Kennedy told investors yesterday to expect "significant additional hiring" approaching a total of 100 local sellers, Tom Taylor reports.

"Be prepared to hear about 'RPM' – Pandora’s internal metric of advertising revenue earned per thousand listening hours," writes Taylor.

See Pandora's 3Q13 financials here. And read some excellent reporting on this in Tom Taylor Now here

Paul Maloney
December 5, 2012 - 12:20pm

In addition to 3Q13 financials (here), Pandora announced its self-reported November 2012 listening metrics, and says its share of total U.S. radio listening in November 2012 was 7.09%. It's October share was as high as 6.75%.

[You can see the latest third-party Webcast Metrics figures, for October, here.]

Pandora streamed 1.27 billion listening hours last month, which is 58% higher than November 2011; and slightly higher than October 2012's 1.25 billion hours (Don't forget, November has just 30 days, and that includes Veteran's Day, U.S. Thanksgiving, and the federal election.).

Pandora's "active listeners" increased 45% from November 2011, to 62.4 million.

See our coverage of Pandora's October listening here.

Paul Maloney
December 5, 2012 - 12:20pm

The Hill reports Republican Sen. Bob Corker of Tennessee is circulating a letter in the Senate strongly critical of the Internet Radio Fairness Act (IRFA), a bill proponents hope will make Internet radio royalty fees more equitable to those of similar forms of radio (read more on the IRFA here).

While the IRFA would simply give Net radio the same royalty-setting standard (known as "801(b)") as cable and satellite radio, Corker's letter says the bill would "force American property owners and creators to provide a subsidy to digital radio services, primarily Pandora." Leading webcaster Pandora currently pays more than half of its revenue for royalties, while cable and satellite radio pay less than 15% of revenue.

The Hill points to the Center for Responsive Politics site (here), which shows "As a senator for Tennessee, Corker's constituents include representatives from the country music hub of Nashville. Corker received $201,241 from the TV, movie and music industries during the 2012 election cycle."

Read more in The Hill here.

Paul Maloney
December 5, 2012 - 12:20pm

Clear Channel has announced its iHeartRadio Internet radio platform is now available on the Logitech UE Smart Radio device.

The UE Smart Radio is Logitech's replacement for the well-knows Squeezebox line. Like the Squeezebox, users can stream content from online radio stations, music services, and their music libraries over their home computer network.

IHeartRadio features streams from more than 1,500 broadcast radio stations, plus the user-generated "custom stations" (a la Pandora).

We have prior coverage of the UE Smart Radio here