Michael Huppe

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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