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Mixed response to latest Pandora financials on Wall Street

By | Published on Wednesday 2 August 2017


There was a mixed response on Wall Street to the latest financials put out by streaming music firm Pandora this week, which confirmed that revenues for the second quarter this year were slightly higher than expected at $367.8 million, though losses were also higher than anticipated, and considerably higher than the same quarter last year. Though in part that was due to unusual costs relating to the company’s recent restructuring.

As previously reported, Pandora recently sold off its ticketing business Ticketfly and parted company with some key execs, including founder and CEO Tim Westergren. This all happened as Sirius XM became a significant shareholder.

Although Pandora’s financials – and a recent decline in the number of active listeners and listening hours – all confirm that the company remains in a tricky position in a tricky business, some investors are now more optimistic about the firm’s future. Partly thanks to the cash injection provided by the Ticketfly sale and the Sirius investment, and partly because the change in management will likely result in a new strategy moving forward. Westergren’s strategy wasn’t especially liked by some key investors.

Opinion still seems divided as to whether the priority for Pandora should be further growing its traditional core business of selling advertising around its free personalised radio service, which accounts for the vast majority of its 76 million active users, or whether it should be pushing its premium options – ad-free personalised radio for five dollars a month and a straight Spotify competitor for ten dollars a month.

Some reckon that ad-funded streaming is never going to be particularly lucrative and that the real money is in premium streams. Though others note that Pandora’s freebie user base, despite recent declines, remains impressive – especially as all those users are in the US – and therefore there remain opportunities to capitalise on the advertising business.

Pandora’s new management need to decide where their priorities lie. Given the company’s dabbling with ticketing via its Ticketfly acquisition didn’t really produce the goods – and with most investors talking about the need for more focus at Pandora post-Westergren – it seems likely the firm won’t be seeking new revenue streams in the near future. Meaning the challenge is how to balance the selling of more ads with the signing up of new subscribers to the premium services, which take listeners away from the ads and the advertisers.