It had to happen sometime. As the number of pure-play Internet audio services increases, Pandora’s user growth number has weakened.
CEO Brian McAndrews has acknowledged that slowing growth in monthly active users. He told Wall Street analysts: “In an increasingly competitive environment, driving monthly active user growth will be more challenging, particularly given our already significant market position. That said, we continue to believe in the long-term opportunity to grow our audience in excess of 100 million monthly active users in the U.S., as growing smartphone penetration, connected autos and other devices accelerates the transition of the 250 million weekly U.S. radio listeners to Internet radio,” according to Seeking Alpha.
The average Pandora listener now uses the service for approximately 10 days per month; that’s almost three-quarters of a day more than same time a year ago, according to the executive.
The company believes its share of U.S. radio listening is now 9.06%, compared to 7.77% a year ago.
For the third straight quarter, Pandora paid more than $100 million in content royalties to rights holders, bringing its total historical payout to more than $1 billion.
Overall, Pandora reported third-quarter revenue of $239.6 million, an increase of 40% based on non-GAAP revenue of $171.3 million in the third quarter of 2013. McAndrews credited the company’s expansion into 37 local markets for some of that, with a total of 109 sales reps.