Media News - Thursday, August 30, 2012

Pandora posts a loss but continues to expand

A year after going public, the popular Internet radio service Pandora is still expanding rapidly, with growth in audience size and revenue. But Pandora Media, the company behind it, continues to post a loss, as its revenue has not kept up with music royalties and other costs. Pandora, which lets users create free music streams tailored to their tastes, had USD 101.3m in revenue for the three months that ended July 31, a 51 percent increase from the same period last year. That was slightly better than the $100.9 million that analysts had expected, according to Thomson Reuters. Pandora now has 54.9 million listeners each month. In the last three months they listened to 3.3 billion hours of music, up 86 percent from last year. Revenue related to use of the service on mobile phones — which counts advertising as well as some revenue from paid subscriptions — was up 86 percent to USD 59.2m. A majority of the listening to Pandora is done on mobile phones, although the company has struggled to increase the amount of money it can make from mobile advertising. But Pandora had a net loss of USD 5.4m, or 3 cents a share, for the quarter, its sixth quarterly loss in two years. For the same period last year, the company lost USD 3.2m, or 4 cents a share. Pandora’s largest expense is music royalties, which increase with each listener. To offset rising royalty costs, Pandora has been building up local advertising sales teams around the country, and also pushing to be included in ad networks that would put its service into direct competition with terrestrial radio stations. After withdrawing from many foreign countries several years ago because of music licensing problems, it is now taking its first steps to return to overseas markets, starting with Australia and New Zealand. (New York Times)

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