Bob Pittman

Pandora’s September 2013 Audience Metrics report shows growth

Wednesday, October 2, 2013 - 12:45pm

This morning Pandora released its monthly Audience Metrics bulletin, showing across-the-board growth in the company’s key indicators.

Pandora’s reported listening hours grew to 1.36-billion, an 18% year-over-year gain from September 2012 (1.15B). Month over month, listening time marginally improved from 1.35-billion hours in Pandora’s August report.

For September, Pandora claims 72.7-million active listeners, a year-over-year increase of 25% (58.3M in September 2012, and 72.1M in August). Some observers regard September as the start of a crucial period of metrics comparisons with iTunes Radio, which claimed 11-million users in its first week. iTunes Radio and Pandora operated concurrently for 13 days in September. Although much was made of the 11-million number, it is too early in the life cycle of iTunes Radio to delineate “active” listeners -- users who return to the service. September, by itself, does not tell much of a story, but it is a reasonable bet that P stock would not have jumped today (+6.3% as of this writing) if Pandora’s active listeners metric had gone down. For one month's report at least, the launch of iTunes Radio does not seem to have had a discouraging impact on Pandora.

Finally, Pandora reports a 7.77% share of total U.S. radio listening for September, a 6.53% lift from a year ago. (August share was reported at 7.46%.) That particular metric has come under scrutiny and criticism recently, by Clear Channel CEO Bob Pittman (here) and Entercom CEO David Field at the recent RAIN Summit Orlando (audio here; coverage here). Pandora’s monthly reports do not disclose methodology or underlying data, but RAIN spoke with a Pandora spokesperson about the share-of-listening statistic, and received this response:

"Pandora arrives at this calculation using data from Triton Digital, Arbitron and the U.S. Census. The estimated total hours include satellite radio. There is no one group that measures total radio metrics. We welcome all third-party research from a variety of established partners, including Triton Digital, Edison Research, The Media Audit, comScore and Nielsen. Ultimately, we would like to see all radio measured side-by-side."

 

Web radio monetization "not quite there, but it's coming," say industry executives at New Music Seminar

Tuesday, June 19, 2012 - 11:30am

New Music SeminarThe development of Internet radio monetization was a key focus among industry executives speaking at the New Music Seminar in New York.

"The monetization of online music is not quite there, but it’s coming," said Clear Channel CEO Bob Pittman. TargetSpot CEO Eyal Goldwerger agreed, explaining that there's "a migration to Internet radio... it takes time for the marketplace to form."

Pandora Senior Vice President of Advertising Sales Steven Kritzman said, "Revenue is just starting to follow the model, and it will continue in an aggressive way, as the platform grows and evolves." RAIN publisher and AccuRadio founder/CEO Kurt Hanson recommended that "Internet radio must learn the lessons from the past," in particular keeping spotloads low.

You can find more coverage from Radio-Info here.

Clear Channel to pay percentage of music advertising revenue to Big Machine Label Group

Tuesday, June 5, 2012 - 8:00am

Clear ChannelClear Channel, the largest owner of radio stations in the U.S., has agreed to pay Big Machine Label Group performance royalties for the use of sound recordings on AM/FM in exchange for more advantageous digital royalty rates. Essentially, Clear Channel will pay the label an undisclosed percentage of music advertising revenue for all broadcasts -- digital and terrestrial. That enables Clear Channel to avoid SoundExchange and the per-song, per-listener royalty rate.

Clear Channel CEO Bob Pittman says that's the advantage of the deal. "I can't build a business space based on paying money for every time I play a song," he said, "but I can build a business by saying I will give a percentage of revenue that I bring in... What we are really trying to do is come up with a predictable model." Clear Channels hopes to make more direct deals with labels this year, but Pittman says they'll need to wait and see if the deal with Big Machine works out economically first. "Starting small is the way to do it because it will have less of an impact."

Said John Hogan, Chairman and CEO of Clear Channel Media and Entertainment: "Today, 98% of our listening is terrestrial broadcast and 2% digital -- with record labels and artists only paid for the 2%. This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenues in one comprehensive framework that will give all of us a great incentive to drive the growth of the digital radio industry and allow everyone to participate financially in its growth. This market-based solution helps bring the best in music to radio listeners wherever they want to hear it."

Radio-Info calls the deal "a potential game-changing revenue deal to fuel digital radio's growth." Billboard dubs the partnership "unprecedented."

Big Machine Label Group includes artists like Taylor Swift, Tim McGraw, Rascal Flatts, Edens Edge, Ella Mae Bowen, Reba McEntire and others. "Now, we can align our interest with radio in a predictable model based on ad revenue so that we can drive digital growth," commented the label's president and CEO Scott Borchetta. "When stations tell me that they can't afford to broadcast digitally, what good does that do me?"

iHeartRadioClear Channel has also launched a new channel on iHeartRadio: Big Machine Radio. It will feature music from the label's artists, plus interviews, rare recordings and a weekly "From the Vaults" feature (including archived radio specials from artists' early days). Find more info about the new channel from Clear Channel here.

What kind of impact will this deal have on the industry at large? "If Clear Channel turns to other indie labels and offers the same deal, it could be setting a market rate precedent for the day, should it ever come, when such a sound-performance rate is legislatively enacted," comments Billboard. "Also, if Clear Channel sticks to dealing with indies, the company could set a rate precedent without dealing with the major labels, which tend to ask for big advances and aggressive rates."

"Because of its sheer size, everything Clear Channel does affects other groups," writes Radio-Info's Tom Taylor. "There could be howls."

You can find the companies' press release here and further coverage from Billboard here and Radio-Info here.

Clear Channel to pay percentage of music ad revenue to Big Machine Label Group

Tuesday, June 5, 2012 - 11:35am

Clear ChannelClear Channel, the largest owner of radio stations in the U.S., has agreed to pay Big Machine Label Group performance royalties for the use of sound recordings on AM/FM in exchange for more advantageous digital royalty rates. Essentially, Clear Channel will pay the label an undisclosed percentage of music advertising revenue for all broadcasts -- digital and terrestrial. That enables Clear Channel to avoid SoundExchange and the per-song, per-listener royalty rate.

Clear Channel CEO Bob Pittman says that's the advantage of the deal. "I can't build a business space based on paying money for every time I play a song," he said, "but I can build a business by saying I will give a percentage of revenue that I bring in... What we are really trying to do is come up with a predictable model." Clear Channels hopes to make more direct deals with labels this year, but Pittman says they'll need to wait and see if the deal with Big Machine works out economically first. "Starting small is the way to do it because it will have less of an impact."

Said John Hogan, Chairman and CEO of Clear Channel Media and Entertainment: "Today, 98% of our listening is terrestrial broadcast and 2% digital -- with record labels and artists only paid for the 2%. This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenues in one comprehensive framework that will give all of us a great incentive to drive the growth of the digital radio industry and allow everyone to participate financially in its growth. This market-based solution helps bring the best in music to radio listeners wherever they want to hear it."

Radio-Info calls the deal "a potential game-changing revenue deal to fuel digital radio's growth." Billboard dubs the partnership "unprecedented."

Big Machine Label Group includes artists like Taylor Swift, Tim McGraw, Rascal Flatts, Edens Edge, Ella Mae Bowen, Reba McEntire and others. "Now, we can align our interest with radio in a predictable model based on ad revenue so that we can drive digital growth," commented the label's president and CEO Scott Borchetta. "When stations tell me that they can't afford to broadcast digitally, what good does that do me?"

iHeartRadioClear Channel has also launched a new channel on iHeartRadio: Big Machine Radio. It will feature music from the label's artists, plus interviews, rare recordings and a weekly "From the Vaults" feature (including archived radio specials from artists' early days). Find more info about the new channel from Clear Channel here.

What kind of impact will this deal have on the industry at large? "If Clear Channel turns to other indie labels and offers the same deal, it could be setting a market rate precedent for the day, should it ever come, when such a sound-performance rate is legislatively enacted," comments Billboard. "Also, if Clear Channel sticks to dealing with indies, the company could set a rate precedent without dealing with the major labels, which tend to ask for big advances and aggressive rates."

"Because of its sheer size, everything Clear Channel does affects other groups," writes Radio-Info's Tom Taylor. "There could be howls."

You can find the companies' press release here and further coverage from Billboard here and Radio-Info here.

Clear Channel to again delay serving ads in customizable iHeartRadio streams, says Pittman

Thursday, March 29, 2012 - 11:55am

Bob PittmanClear Channel CEO Bob Pittman says the custom radio stations on iHeartRadio will remain ad-free for "a few more months," according to the AP.

When Clear Channel officially launched iHeartRadio's custom stations in October of 2011, it said the service would remain ad-free through the end of the year (RAIN coverage here). Then the company announced it wouldn't serve ads on the service until April 1, 2012 (more here).

Now Pittman says the deadline has been pushed back again as Clear Channel tries to figure out how to make in-stream ads "more 'compatible' with the user experience." He fears existing Internet radio ads on servces like Pandora are "disruptive and annoying" to users. 

You can find the AP's coverage here.

Pandora listening growth and alliances attract attention from media and critics alike

Wednesday, January 18, 2012 - 11:00am

Pandora has been enjoying some attention from business and mainstream media lately. The webcaster took the opportunity of the International Consumer Electronic Show last week to show off not only their latest audience numbers, but their growing set of automotive- and consumer electronics-alliances.

[According to Pandora's own reporting of their audience, they now have more than 125 million registered users (which comes down to about 40 million "active" users), who listen for an average of 18 hours each month. The Triton Digital Webcast Metrics report for November (here) credits Pandora with its highest-ever share of measured Internet radio listening, 68%.
 
And for the record, more than 450 different electronics devices, from smartphones to DVD players to Dish Network receivers, now deploy Pandora (several of these were announced at CES, see our coverage here, here, and here). With the new alliances with Kia and Acura, Pandora has deals with 16 automotive brands and 7 aftermarket manufacturers.]
 
Jefferson Graham of USA Today interviewed Pandora founder Tim Westergren (with video, here), who said growth still takes precedence over profitability for Pandora (which has had just a single profitable quarter so far). "The opportunity for us is global," Westergren said. "That's the big vision."
 
That won't come at traditional radio's expense, insists Clear Channel CEO Bob Pittman. "Radio is doing very well. It's in every car and most homes. It's embedded in the world. If you want personalized radio, you have to be online, and not everybody can always be online."
 
Currently, Pandora is U.S.-only, because of prohibitive complexities in securing the necessary licensing deals with record labels country-by-country. And Westergren is far from satisfied even with the arrangements here in the U.S., which last year cost the company more than half its gross revenues. "That compares to satellite radio, which pays 7.5% or 8% of gross revenue, and broadcast radio, which is completely exempt from it," he told Fast Company last week (here). 
 
SoundExchange president Michael Huppe told the magazine he finds the comparison unfair. After all, Pandora is focused on growing listening, not profitability, right? "It's a bit disingenuous to simply look at percentage of revenue as a marker that you judge everything by. It's no secret that Pandora's focus over the last five years has not been on generating revenue. They've been trying to work on their product, their brand, and building a huge following. I salute that. But it's not unusual for companies in the early stages to focus on things other than cash flow."
 
Again, you can find the USA Today coverage here; the Fast Company article here.
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