Pandora: Gaining Users…Losing Listening


While Ando Media has been releasing Internet Radio numbers since 2005, the company has repeatedly made changes to how it gathers and tabulates its publicly reported data.

Because of the changes, we really only have seven months of somewhat comparable numbers. Despite the limited data, we’re already starting to see that the differences between broadcast and Internet are more than just the way the services are delivered.

We noted the latest change to Ando Media’s methods the other day. In the past the company counted listening spans of any length. Now Ando Media only counts listening spans less than twenty-four hours.

The latest change ought to have a negative impact on TSL, time spent listening–while providing more realistic numbers.

We looked at the top 10 services at the beginning of the year and compared their February TSL under the old rule, to their March TSL under the new rule.

Ando TSL Change

Out of the top 10 services in Ando Media’s ranker, seven lost TSL in March. As the graph above shows (click on it), Pandora and Clear Channel lost the most TSL, 11% each.

Citadel, Radio One, and AccuRadio actually gained TSL despite the rule change.

The top 10 services started the year with a combined TSL of 18.7 hours, and by April the group’s TSL had fallen to 16.4 hours, a 12% decline.

Pandora TSL
(click on graph)

Pandora stands out because when it first appeared in the Ando Media ranker in September of last year, it had the distinction of having the lowest TSL of any service in the ranker. In the seven months since, it has continued with that distinction, actually losing TSL every month since.

If you’ve followed the service’s growth, you know that registered users have skyrocketed. Total sessions have nearly tripled, and average sessions have more than doubled.

But what about that TSL?

Broadcast program directors understand that with most formats there is an inverse relationship between cume and TSL. Generally speaking, formats that attract large audiences (like Top 40) generally have lower TSL, while smaller cuming stations have longer TSL.

Is Pandora’s meteoric growth in users behind the declining TSL?

Were Pandora a top ranked mass-appeal broadcast station, we would expect low TSL. However, the service shares more characteristics with a small audience niche broadcast station with above-average TSL.

Pandora is a service that provides individually customized stations, in their words:

The result is a much more personalized radio experience stations that play music you’ll love – and nothing else.

A service that creates personalized radio for each user ought to have high TSL. Consequently, the service should be able to rapidly grow users and see no decrease in TSL, especially given that its TSL is considerably smaller than the streams of broadcast groups.

A possible explanation is the growth of mobile. Mobile user are the fastest growing segment of Pandora’s user base. It stands to reason that TSL would decline as the proportion of mobile users increases.

While Pandora’s TSL was already declining before mobile users were counted, it doesn’t preclude mobile having a negative impact.

If mobile users spend less time with Pandora than computer-bound users, then the service’s TSL should continue to decline as smartphone penetration increases. That could become problematic for a service selling advertising.

Right now with everyone focused on Pandora’s rapid growth, the continuing decline in TSL hasn’t gotten much attention.

New well-marketed stations have always enjoyed a honeymoon period during which rapid growth concealed fundamental flaws. Over time the flaws invariably caught up with the station.

We suspect this is one rule that the Internet will not disprove.

— Glenda Shrader Bos & Richard Harker of Harker Research