Report: Pandora Failing To Grow Paid Users

Pandora’s share price took a battering the other week, after investors were spooked by a bad news day for the US streaming platform.

The controversial company’s stock price fell by more than 30% in the 24 hours after it reported its Q3 2015 results on Thursday, October 22.

Triggers for the sudden loss in confidence included a $90m settlement with record labels for the use of pre-1972 tracks, and the fact that Pandora missed its quarterly revenue forecasts, despite 30.1% year-on-year income growth.

Yet as the dust settled, Music Businnes Worldwide reports another possible threat became clearer.

Pandora’s active listener numbers dropped quarter-on-quarter by 1.3m (1.6%) to 78.1m in the three months to end of September 2015 (Q3).  Its total quarter-on-quarter listener hours also fell, down 3% from 5.30bn in Q2 to 5.14bn in Q3.

Some analysts quickly blamed one candidate above any other for these stumbles: the launch of Apple Music, and its tempting three-month free trial, which arrived on June 30.

Further MBW analysis shows that Pandora is failing to grow its subscription tier, despite recent attempts to promote it using its own free trial.

Meanwhile, its 1.3m fall in listeners from Q2 2015 to Q3 2015 completely occurred amongst its free / ad-funded tier.