This Internet Radio Company Is Making Good Progress

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Sep 19, 2014

Pandora (P, Financial) is on a roller coaster ride after its fantastic second-quarter results. It seems the company’s significant investments have worked and are paying off. Pandora is pleased with a 38% growth in revenue, and it is now more focused on attaining new levels of profitability. The company has plans to reinvest in the venues that have grown well in the last quarter. Pandora is focusing on strengthening its short-term and long-term perspectives, and its effort to expand its product development capability is the first step toward it.

Focusing on the opportunities

Pandora’s prime focus is on the opportunities that it is seeing in local and mobile. It is thriving to monetize these opportunities to the best extent. It is seeing good improvement in user engagement. Its daily listening hours have increased by an impressive number. Despite seasonal weakness, Pandora saw active user growth by 7.5% year-over-year from 71.1 million to 76.4 million.

Pandora is seeing growth in the U.S. listening hours, and it is pleased with the estimates published by Edison, which shows that Pandora’s overall radio market share has improved significantly. It denotes a good 9.2% of total broadcast satellite and Internet radio listening. This is great news for Pandora. But it all depends on how investors receive this fact. This is a clear indication that Pandora is an undisputed market leader in the growing radio market.

As Pandora is seeing growth in market share as well as streaming hours, it is now focusing more on monetizing listening hours. In fact, it has already started showing positive signs. RPM for Pandora are rising. In the second quarter, the total RPM improved by 7% from $40.53 to $43.41. Moving further, Pandora believes that the investments it has made in the past are paying off and to keep this monetization rolling, Pandora is engaged in developing innovative programs for advertisers so they can further drive monetization forward.

Attracting more listeners

To improve its revenue, Pandora, for the first time, has integrated an add product within a listener station list, in which it saw some well-known names as customers in the beta launch. To take this to the next level, Pandora has introduced Pandora’s Discovery Den to Miami as a part of the hottest week in Latin music in partnership with State Farm, P&G Orgullosa, and Sprint.

The company has also entered into a partnership with StubHub. With this, it is able to give exclusive access to the true music fans, which is exciting and can help Pandora to engage more listeners to it.

Pandora is also expecting a boost in sales with David Gerbitz joining in as EVP of revenue operations. Pandora is confident of good results in its operations as its new official is extensively experienced in complex and fast-growing sales operations. Pandora is pleased seeing the growth in the new customer addition as the statistics say that it has now surpassed 3.5 million of approximately 100,000 net new from the prior quarter. However, Pandora did raise the price for the new subscribers. Still the market-leading image worked for it; seems that the subscribers rely on Pandora.

Conclusion

So, Pandora will continue to capture the opportunity ahead to broaden its energy and focus, working more closely with artists in the music industry to harness the power of Pandora’s platform. As a result, it is now a good time to be a Pandora investors as the company is reporting good growth.