Pandora last week published 2016 performance numbers
that indicate growing advertiser revenue. But it also talked about why its long-term
strategy is focused on launching on-demand subscription music services to compete
with Spotify, Apple Music, Tidal and others.
hours grew 4 percent in 2016 but total active listeners dipped to 81 million
from 81.1 million the year before, according to the company’s earnings call. However,
paying subscribers grew over the year by 12% to 4.39 million following introduction
of two on-demand subscription services.
Maybe most important was
that nearly 70 percent of new Pandora Plus subscribers have been acquired “on
platform, virtually free of acquisition costs.” CEO Tim Westergren, Pandora’s co-founder, said, “This
up-sell path will continue to be the centerpiece of our go-to market for the
new Pandora Premium service.”
Plus in 2016. It’s priced at just under $5 a month. Westergren
said the phased rollout of the ad-free service Pandora Premium — $10 per month and allowing listeners to skip
songs plus enjoy other enhanced services — is underway, with a
broader launch coming in March.
announced late last year it would trim about 7 percent of its 2,200 employee
workforce. It reported yearly revenue of $1.385 billion, a significant 19
percent increase from the previous 2015. But its GAAP net loss for the year
ending Dec. 31, 2016, was $343 million with adjusted EBITDA showing a $119.5
The streamer’s fourth quarter jump in advertiser
revenue was 16 percent compared to the previous year. In
fact, Pandora said it had its highest revenue ever for a quarter with $392
million in Q4 2016.
Westergren said on the conference
call Thursday that his company “demonstrated the ability to drive leverage in
the ad-supported business while effectively accelerating subscriptions for its
Pandora has yet to turn
a profit but Westergren said the company is moving towards full-year 2017
“We are laser-focused on profitable growth of
our ad-supported business, the launch and growth of our subscription products
and a robust artist-to-fan platform to drive ticket sales and engagement across
the service,” Westergren said.
Pandora’s Ticketfly ticketing
service business Q4 revenue was $19.4 million, growing approximately 25
percent year over year.