Welcome to Mobile Marketer. Skip directly to: main content, navigation, search box.
  • Email this
  • Print
  • ARTICLE TOOLS
    SPONSOR

Receive the latest articles for free. Click here to get the Mobile Marketer newsletters.

Pandora is making more money from mobile as advertisers embrace the platform

Pandora

Pandora’s mobile revenue growth outpaced mobile listener growth for the second quarter in a row, pointing to how the Internet radio company is improving its ability to monetize mobile.

During the fiscal 2013 fourth quarter, Pandora’s total mobile revenue grew 111 percent for a total of $80.3 million while mobile listener hour growth was up 70 percent year-over-year. Of that, $70.8 million came from mobile advertising and $9.5 million from mobile subscriptions.

“We remain focused on our mobile product as hours and ad revenue continue their shift toward mobile,” said Joseph Kennedy, chairman, CEO and president of Pandora, Oakland, CA, during a conference call with analysts to discuss the results.

Sign up to receive Mobile Marketer Daily. The premier mobile marketing publication. Free!

“Mobile provides national, regional and in particular local advertisers, the ability to reach listeners on their most personal and portable device, in their cars or on the go, wherever they may be,” he said.

“Pandora is executing aggressively on a large and growing opportunity as we expand our mobile leadership among both listeners and advertisers, demonstrated by the growth in mobile ad revenue at a faster rate than our growth in mobile listening hours.”

Papa John's

A Papa John's ad in Pandora

Executive changeover
On the same day that the results were released, the company also announced that Mr. Kennedy will be leaving and that the process of finding a successor has begun.

Mr. Kennedy will remain in his current role until a replacement is named.

Earlier, Pandora said it has begun limiting free mobile listening to 40 hours per month.

The change is expected to impact less than four percent of mobile listeners while helping the company to manage usage growth and the associated cost of content in order to free up dollars for additional investments in key initiatives.

Key strategy
Mobile has become a key method for delivering content and advertising for Pandora and continues to grow quickly.

The company reported that listening on mobile represented 79 percent of total listener hours during the fourth quarter.

For the fiscal year, mobile revenue grew 105 percent for a total of $225.9 million while mobile listener hour growth was up 89 percent. In comparison, overall revenue during the fourth quarter grew 54 percent for a total of $125.1 million.

As a result of Pandora’s success driving mobile monetization, total mobile RPM or ad revenue per 1,000 listener hours reached a record high for the year of $23.83. During the fourth quarter, mobile RPM reached $25.05.

In comparison, Web RPM for the year was $52.36 and, during the fourth quarter, $52.82, down from $56.22 in same quarter last year.

Pandora also revealed that most of its subscription growth is coming from mobile.

Reaching scale
To take advantage of the growing opportunity in mobile, the company continues to build its mobile offerings.

In the third quarter last year, Pandora 4.0 was introduced. It includes expanded functionality such as a detailed personal music profile, social sharing capabilities and other features available on mobile for the first time.

For advertisers, Pandora 4.0 also offers new capabilities, including unified sponsorships across all mobile devices.

As consumers increasingly consume content via mobile devices, Pandora’s strength in mobile has helped propel it to an eight percent share of all U.S. radio.

“We now have the audience scale that's meaningful to national advertisers, meaningful to local advertisers, radio, interactive,” Mr. Kennedy said. “We didn't have that kind of share and scale even a year ago, [or] certainly two years ago."

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Music, Pandora, Joseph Kennedy, mobile radio, mobile marketing, mobile

  • Trackback url: http://www.mobilemarketer.com/cms/trackback/14929-1
  • | Follow us on Twitter |
Please click here to download now!