The price of profits pressure pushes Pandora


Mary Beth GarberAs Pandora struggles to produce profits for its stockholders, I see three clear, growing impediments to their progress:

–Lower listening levels and much lower growth rate

TLH (Total Listening Hours) is down by –8% in 2Q 2013 vs. 1Q 2013 (Triton)

Pandora daily minutes per user have been down year over year by single to double digit % for four consecutive months (–12% in July 2013 vs. July 2012)

–Increased spot load probably prompting lower ratings

The audio ad load is up about 70% this quarter versus last quarter

An 80% increase from last year in complaints about commercials by Pandora users, per Jacobs Tech 9

Pandora remains the service most associated with having commercials and pop-up ads: 77% of surveyed Pandora users associate it with commercials while 68% of them associate it with pop-up ads (Ipsos study)

–Increasing competition on every level – new services and expanding ad sales structures by their competitors

As analyst Regan Barua noted in Seeking Alpha, “Given the increasing competition in the U.S. mobile advertising market, I believe it will be difficult for Pandora to maintain its current market share.”  Add the results of decreasing listening cap to 40 hours and increasing ad levels, that adds up to trouble in Pandora City.

— Mary Beth Garber, EVP/Radio Analysis and Insights, Katz Radio Group

¹(Source:; Triton Digital)


³(Source: July 2013 iHR Brand Tracker, Ipsos Media CT, Base: 18-49 who are Pandora users)

⁴Source: Jeff John Roberts Mar. 12, 2013 re Spotify

⁵Source: various online newsblogs and newsletters, Spotify during RAIN Summit 2013

⁶Source: Analyst Michael Graham told the Canaccord Genuity Growth Conference yesterday in Boston.

⁷Source: Jacobs Media TechSurvey 9; 78,111 radio listeners / January 29-February 19, 2013

*Source:  Seeking Alpha August 15, 2013