Shares are up 14% in late afternoon trading and touched an all-time high of $32.45 today after Pandora unveiled surprisingly strong audience results for December — and a plan to introduce in-car advertising. The streaming music company had 76.2M active listeners in the month, up from 67.1M a year ago, and accounted for 8.6% of U.S. radio listening, up from 7.6% last year. The results “once again demonstrate the resilience of the service in the face of iTunes Radio competition [which launched in September] and Spotify,” says Cowen and Co. analyst John Blackledge. The company also announced at the International CES confab that this month it will harness users’ smartphone connections to introduce in-car ads for companies including BP, Ford, State Farm, and Taco Bell. “Nearly half of all radio listening takes place in the car,” says Chief Marketing Officer Simon Fleming-Wood. ”We knew early on that to redefine radio, we would need to seamlessly deliver Pandora through in-dash entertainment systems.” The service says it can offer “a more targeted audience than traditional radio can provide” by providing 15- and 30-second ads to “car-bound audiences” via more than 270 devices that offer Pandora in cars. The company says that it will pump fewer ads to drivers and passengers and it does to Pandora users on other platforms — except those who subscribe to the ad-free Pandora One premium service. Wedbush Securities’ Michael Pachter …
Many investors weren’t sure what they’d see after February when the streaming music company, eager to control its royalty costs, put a 40-hour-a-month cap on mobile listening. But they liked what they saw in the Q1 report out today, even though the net loss increased: Pandora‘s shares are up 9.3% in post-market trading. The company lost $28.6M in the quarter that ended in April, worse that last year’s $20.2M loss, on revenues of $125.5M, +55.4%. The revenue number beat expectations for $123.8M. And the net loss, at 10 cents per share not including one-time expenses, matched the consensus forecast. Total listener hours were up 35% to 4.2B and Pandora says that ad sales increased 49% to $105.1M. Much of the jump is due to mobile use: The company generated $23.23 in ad revenue for every 1,000 ad-supported listener hours, +29.9%.
The report this morning from The NPD Group surprises me, although perhaps it shouldn’t considering how quickly the music business is changing. The research firm says that in Q4 online services including Pandora, iHeartRadio, and Spotify accounted for about 23% of the average weekly music listening time among 13-to-35 year olds, up from 17% at the end of 2011. The latest figure is just about even with AM/FM radio: It accounted for 24% of the music listening time among young fans, down two percentage points from the previous year. The change is “driven by mobility and connectivity” — especially the growing use of smartphones as music devices — says Russ Crupnick, senior vice president of industry analysis at NPD. The firm’s latest Music Acquisition Monitor study, based on its consumer surveys, says that young listeners increasingly see streaming services as attractive alternatives to CDs and digital music files. Digital files accounted for 15% of their listening time followed by on-demand services (14%), CDs (9%), satellite radio (5%), and the remainder for other sources. Pandora remains by far the most popular online service. It’s used by 39% of the young streamers followed by Clear Channel’s iHeartRadio (11%), the free version of Spotify (9%), Grooveshark (3%), Slacker (2%), Pandora One (2%), TuneIn (2%), Last.fm (2%), and Xbox Music (2%). A little more than half of the group said that they mostly listen to music in cars. Traditional radio still has …
The tablet wars are intensifying as the holiday shopping season approaches: Amazon kicked things up today by announcing that Kindle Fire customers will only have to fill out one form to register for multiple media services including Netflix, Rhapsody, Pandora, Facebook, and The Weather Channel — and games from companies such as Zynga, EA, Gameloft, PopCap, and Rovio. What’s more, people who go through Amazon to buy the apps for their tablet will also be able to access them on other Android devices including mobile phones. The company will start to ship Kindle Fire tablets on November 15. The announcement follows Barnes & Noble’s announcement on Monday that it’s new Nook Tablet will include apps for Netflix, Hulu Plus, and Pandora.
Everyone’s reacting today to Greek Prime Minister George Papandreou’s startling decision to hold a referendum on the deal cut last week to save his country’s economy. The agreement is unpopular — lenders would wipe out about half of Greece’s debt if the country accepts austerity measures that would cut social services. The fear is that a Greek default on its debt would have a ripple effect, pulling down other troubled economies.
Media stocks are falling along with the overall market. At mid-day, the Dow Jones Media Index is -1.6%. Sony’s been the hardest hit of the industry’s big guns with shares down 12%. Here’s how the others are faring: Disney -7.6%, Viacom -7.4%, CBS -5.6%, Time Warner -4.5%, News Corp -4.4%, and Comcast -2.4%. Media companies down double-digits include Entercom (-13.4%), IMAX (-11.9%), and Gannett (-10.9%). The only gainers thus far are Time Warner Cable (+2.4%), Regal (+1.9%), Lionsgate (+1.6%), and Pandora (1.1%).
Everybody agrees that broadband music site Pandora is a great service, but is it a great business? We’ll start to see now: The company, which went public in June, had its first earnings call today, reporting second-quarter revenue ($67 million) and profit (2 cents per share) that both exceeded analyst expectations. Ad sales and subscriptions more than doubled compared with last quarter, the company said. Looking ahead, Pandora forecasts estimate-beating revenue of $69.5 million-$72.5 million and even to a loss of 2 cents a share (excluding items) in the current quarter and a loss of 5 cents-7 cents for the year as it figures out how to fight competition from fellow streaming service Spotify, Sirius XM and terrestrial radio and blend commercials into its free model. The stock rose after hours on the news.