Pandora tops non-game app list with $80M in Q3
- Pandora, the streaming music service with 73.7 million users, grossed more money than any other mobile application in Q3 2017, according to Sensor Tower data cited by TechCrunch. Pandora fueled its sales growth with subscriptions to its $10-a-month premium service that lets users request commercial-free music on demand from a mobile device.
- Pandora’s $80 million in U.S. app store revenue knocked video streaming company Netflix out of the top revenue spot during the period. Outside the U.S., Netflix maintained its lead among non-gaming apps. Sensor Tower's data only include app store revenue, not including ticket sales and other sources of income.
- Pandora’s stock fell 12% in extended trading on Thursday after the company reported results that disappointed investors. Its adjusted loss per share of 34 cents was much worse than Wall Street's average estimate of 8 cents. Total listener hours slipped 4.6% to 5.15 billion in Q3 2017 from 5.4 billion a year earlier.
Pandora is in a fiercely competitive business with much larger tech companies that can afford to lose money in music streaming services. Amazon Music, for example, bundles a big portion of its song library with its Amazon Prime service, which also offers free video streaming for some programming and free two-day shipping from its e-commerce site. Apple and Google have billion-dollar businesses outside of music, leaving a handful of startups like Spotify and Deezer as pure-play music streaming competitors to Pandora. Pandora has had to retreat from some markets, such as Australia and New Zealand, while also selling off its Ticketfly event-ticketing service.
Pandora is the second-most-popular audio streaming service in the United States after YouTube, according to an August study from marketing firm Fluent. About two-thirds of respondents who listen to streaming audio use Pandora, the survey said. Pandora Premium, which crossed the 1 million subscriber mark last month, is comparable to paid offerings from Spotify, Google, Apple Music and Amazon Music (which has a paid tier in addition to Amazon Prime). Pandora boosted its subscription revenue in Q3 2017, as reflected in its earnings report and Sensor Tower’s data. Pandora, which also has a mid-tier plan for $5 a month, increased total paid subscribers 29% to 5.2 million in the quarter from a year earlier.
Meanwhile, total revenue grew 8% to $378.6 million from a year earlier, in line with Wall Street's average estimate of $380 million, and the company’s adjusted loss narrowed by 20% to $5.3 million. Subscription and other revenue jumped 50% to $84.4 million for the comparable periods. Pandora's ad revenue rose a paltry 1% to $275.7 million from a year earlier. Advertising revenue growth included an increase in the average price per ad, offset by a decrease in the number of ads sold, the company said. If Pandora continues to lose money, it may have to start shopping itself to a bigger company, as it has tried to do in the past.