Insight: Pandora Has Problem With 18-24-Year-Olds

Will Pandora be to streaming what MySpace was to social media?

High on the list of priorities for Pandora’s new CEO: fixing the music service’s huge problem with 18- to 24-year-olds.

 Pierre Bouvard, CMO of Cumulus and Westwood One, writes about it in his latest post on the Westwood One blog.   Bouvard cits five findings from Edison Research’s “Share of Ear” study explain why trouble is brewing for Pandora among 18-24s:

• Among 18-24s, time spent with on-demand services is surging at the expense of owned music. From fall 2014 to fall 2015, the share of total audio time spent with Americans’ owned music has dropped from 24% to 20.5%. Meanwhile, the share of time spent with on-demand services Spotify and YouTube has jumped from 16.3% to 23.7%. “For the first time, 18-24s are spending more time with music they rent versus music they own.”
• Pandora has a huge 18-24 problem and it’s called YouTube and Spotify. YouTube and Spotify are now nearly 2.5 times as big as Pandora. Over the last year, share of 18-24 time spent listening to YouTube and Spotify has surged 45%. Meanwhile Pandora’s 18-24 shares are up only a bit.
• Spotify’s 18-24 time spent listening is going through the roof and will soon overtake Pandora. In one year, Spotify’s 18-24 share of listening has grown 134%, from a 3.5% share to an 8.2% share.  For all of 2015, Pandora hovered around a 9% share.
• Spotify’s reach is growing; Pandora’s reach growth has stalled. Among all people 13 and over, the number of total uniques, or different people Pandora reaches, has flatlined. Spotify’s total reach is up 23% since fall 2014.
• Spotify’s audience has more passion compared to Pandora’s. Spotify does a much better job converting reach into audience share of time spent listening.  Among 18-24s, or every 1% of reach, Spotify generates a .45 share. Pandora is only able to convert 1% of reach into a .37 share.