RAIN 5/24: Pandora revenues surge 58% to surpass $80m, but outpaced by cost increases

Michael Schmitt
May 24, 2012 - 11:10am

Pandora revenuesPandora yesterday released its fiscal results for the first quarter of fiscal year 2013 (ending April 30, 2012), which show that overall revenue reached $80.8 million -- up 58% year-over-year. Of that, 87.4% (or $70.6 million) came from advertising, up 62% year-over-year. Another $10.2 million came from subscriptions (up 38% year-over-year).

But costs grew as well, nearly 80% year-over-year, in fact. Content acquisition costs, which include royalty payments, grew 91% to $55.8 million -- nearly 70% of total revenue. Marketing costs also grew 81% to reach $23.5 million. All told, Pandora reported a loss of $20.2 million for the quarter, up from a loss of $6.8 million last year.

However, the company improved its guidance for the year from an adjusted loss of 11-16 cents on revenue of $410-420 million to a loss of 7-11 cents on revenue of $420-427 million. Additionally, as of publication Pandora's stock is up $1.77 for the day ($12.10 per share).

As for audience growth, Pandora says it now has 51.9 million active users (up 53% over last year) and 150 million total registered users. Total listener hours during the quarter reached 3.09 billion, up 92% year-over-year.

Pandora says it now has a 71.7% share of the top 20 web radio services' listening during Q1 2013 and 5.95% of total U.S. radio listening (up from 3.11% last year).

Joe Kennedy, Pandora CEOPandora CEO Joe Kennedy (pictured left) says the company "has the audience to massively disrupt" the radio market. It's "already larger than the largest AM or FM station" in many markets, he said (RAIN coverage on Pandora's latest local ratings via Triton Digital here).

Additionally, "[advertisers] are moving quickly to speak with their target customers across the Pandora platform, with the majority of the top 50 digital advertisers in the U.S. already having bought multiplatform advertising on Pandora. Pandora is the future of radio," he said.

Kennedy also spoke about how Pandora is seeking "integration into the systems radio buyers use every day," and increased hiring of local sellers. More on Pandora's local sales effort in the next story (here).

Radio Ink editor-in-chief Ed Ryan comments (here), "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."

To read more about Pandora's fiscal Q1 2013 results, find the company's press release here and coverage in the Wall Street Journal here.

Michael Schmitt
May 24, 2012 - 11:10am

Tim Westergren speaking at Pandora's event in Chicago

Pandora on Monday hosted around 200 ad buyers for a party to celebrate the launch of its new Chicago sales office.

The "just launched local sales effort" by Pandora in the Windy City includes a staff of 25 and is headed by Gabe Tartaglia, previously GSM for CBS Radio's WUSN and WCFS in Chicago. Pandora's Director of Mobile and Emerging Media, Kim Luegers, previously with DraftFCB, OMD, and Mediaedge, is also based in the Chicago office, located in the Tribune Tower.

The launch party took place at theWit Hotel's ROOF and featured an appearance by Pandora founder Tim Westergren. "We have a million monthly listeners just in Chicago," Westergren told the crowd, "which makes us one of the biggest radio stations in this city. And we're growing like a weed. We hope to soon be the largest."

He explained that Pandora is undergoing a transition to "not just be big on a national level, but getting to a level where we're big locally… [we have to] think about ourselves like a local radio station. We are like a lot of big local radio stations all put together, all across the country... We're becoming radio. Radio writ large."

Westergren praised traditional radio for still being "the pipeline to music for Americans." But "there will come a time when people think about 'radio,' and it will really be 'personalized radio'

"We're going to revolutionize radio... reinvent it."

Michael Schmitt
May 24, 2012 - 11:10am

Tivoli RadioTivoli Audio has launched a new iPhone app, "Tivoli Radio," which offers access to curated selection of Internet radio streams.

"Users can listen to a select number of stations from around the world that were the most popular stations among [Tivoli's] customers. The app includes 10 genres with 10 stations in each of those genres. A 'Tivoli’s Favorites' category is also included," reports 148Apps.

The free app's interface mimics the look of Tivoli's tabletop radios, many of which can stream Internet radio (RAIN coverage here). You can read more about the new app from 148Apps here.