Pandora Sees Active Users Fall, Paid Subscriptions Rise

According to Marketwatch, Pandora Media Inc. continues to make progress with its initiatives meant to drive listeners back to its platform, which helped the company deliver strong quarterly earnings Tuesday.

Shares were up 6.4% in after-hours trading, after the music-streaming pioneer beat top- and bottom-line estimates.

The company once again saw a decline in listener hours on a year-over-year basis, but it was less pronounced than in the past. Users spent 5.1 billion hours listening to Pandora  in the June quarter, compared with 5.2 billion hours in the year-earlier period. Analysts were expecting listener hours of 4.9 billion.

Significantly, subscription revenue was boosted by an increase of 351,000 subscribers to its Pandora Plus and Pandora Premium plans, giving the company roughly 6 million total subscribers. Overall, Pandora added more than twice as many subscribers in Q2 than it did in Q1, after the launch of its $14.99/month family plan offering in June, which it expects to be "an important growth contributor" moving forward, execs said on its earnings call.

Robert Lynch

Pandora Chief Executive Roger Lynch told MarketWatch that the company is making strides when it comes to its listener-hour metric, thanks partly to new data-driven marketing efforts that draw users back to the platform. He said such initiatives are having a positive impact on monthly active users, subscriber growth and overall engagement.

Pandora continued to benefit from Premium Access, a feature that gives listeners to the company’s free radio tier the ability to play some songs on demand in exchange for watching a video ad. Prior to the introduction of Premium Access, on-demand listening was only available to those who subscribed to Pandora’s Premium tier.

Lynch also discussed the early results of some new initiatives geared toward listeners, including family plans as well as partnerships with both AT&T Inc. and Snap Inc.’s Snapchat. He said that Pandora’s three listener tiers “really open up a lot of possibilities on partnerships” because it can make arrangements geared toward free and paid offerings.

Earlier in the day, Pandora announced that it was making programmatic ads widely available on its platform, after initially offering them in a limited manner. The programmatic capabilities leverage technology from AdsWizz, a company Pandora recently acquired.