Pandora loses nearly 2 million active listeners following Apple’s iTunes Radio debut

“Pandora Media Inc. (NYSE:P) saw its shares trade higher on Tuesday after releasing its media metrics for the month of October 2013. There is just one small problem with this on a subscriber basis and metric of free music online,” Jon C. Ogg reports for 24/7 Wall Street.

“Pandora’s listener hours are ticking up and its total share of radio is ticking up. Both of those metrics are good, but we see a possible problem developing in that the number of active listeners posted a fairly large decline from the prior month, and this has not been seen before,” Ogg reports. “Wall Street thinks it is good news that the hours are trending up and market share is trending up, but what does it say if Pandora’s active monthly listeners continues to decline? If you just use logic, then the simplest answer is that Pandora is getting more out of each active user.”

“Perhaps this active user concern is more of an issue from Apple Inc. (AAPL)’s unveiling a competing iTunes Radio. Apple signaled that some 11 million users tried iTunes Radio in the first days after its mid-September launch,” Ogg reports. “Listener hours for Pandora October 2013 were 1.47 billion. For September 2013 they were 1.36 billion. Active listeners were 70.9 million at the end of October 2013. They were 72.7 million at the end of September 2013… Count on us looking closely here for the metrics in November. If the same trend is seen, Wall Street may not deem it good enough that Pandora is milking more share and more hours from a shrinking group of loyalists.”

Read more in the full article here.

Related articles:
Pandora founder: Impact of Apple’s iTunes Radio ‘will be modest on Pandora’ – September 24, 2013
At this pace, iTunes Radio beats Pandora in less than a month – September 24, 2013
Pandora drops as much as 12% on Apple’s iTunes Radio competition – September 23, 2013
Apple releases iTunes 11.1 with iTunes Radio – September 18, 2013
Pandora: iTunes Radio roadkill – September 17, 2013
Apple’s iTunes Radio is going to put Pandora into a world of hurt – September 14, 2013
Anticipating customer surprise, Apple begins training support staff on iOS 7 and iTunes Radio – August 29, 2013
Pandora would be wise not to write-off Apple’s potent iTunes Radio – August 26, 2013
Apple’s iTunes Radio to debut in September with McDonald’s, Nissan, P&G, Pepsi sponsorships – August 21, 2013
Apple’s new iTunes Radio is designed to be the largest streaming radio service – July 13, 2013
Apple announces iTunes Radio – launches this fall – June 10, 2013

29 Comments

    1. Market share only counts if its Apple’s share that is being counted, and then AAPL is penalized because its share is lower than others. How much Apple makes from that share doesn’t count.

  1. Good grief, it’s like sharks smelling blood on this site. Everyone loved Pandora until Apple came out with iTunes Radio, and now they want to see them destroyed. A very fickle lot, this bunch.

    1. I couldn’t agree more. I’ve been paying for iTunes match since it’s been a thing. So, ad-free iTR is just a bonus. It’s great and I use it a lot, but I still use and pay for Pandora too. I love the shuffle stations feature, especially with my weird mi of tastes. Pandora was and still is an awesome service.

      1. Slacker still is my go to. With the caching feature and better stations it’s just better. I tried the hits of the 80s pop station on iTunes. Sorry but some of the picks are not good at all. The Christian rock stataion sucks I either can pick a metal station or Christian alt or pop.
        I don’t know but I like slacker. Mainly too because I have spent allot of time crafting my stations and don’t want to start over. And with slacker every year I get free slacker plus. I just go to a new computer and do one of the trial pay things that is free or cost a couple $$ and boom I have slacker for another year free.

        Pandora always sucked I don’t like the way it picks related songs. It thinks weird. Plus slacker has a larger database of music.

  2. Pandora had almost no competition before. The first alternative stood a good chance at grabbing a big piece of the pie. Subsequent start-ups will get less of a piece. Apple struck at just the right time. The Apple song catalog is larger. With Pandora I was tired of hearing the same songs. During long sessions the genres blurred or deviated from the original request. Competition should prompt action on Pandoras part. They were hit hard because of complacency. Much like the desktop industry. Innovate or lose !

  3. What market are you guys looking at? Pandora gained more listeners since iTunes radio launched. and their stock is up nearly 9 percent today. I cancelled Pandora and paid my $25 for iTunes radio. But I am looking to go back to Pandora. I miss the lyrics and all the information. To me iTunes Radio is very incomplete. All my coworkers agree as well. I also am blown away by the iOS upgrade to Google today. Very nice, gives Siri a serious challenge.

  4. The problem for Pandora looks to be declining active listeners who are listening longer. If paid subscribers also declined in proportion, then Pandora’s expenses went up because Pandora pays per song played.

    Pandora’s model really works best with a large number of subscribers who don’t listen for a long time (thus more paid subscriptions and more unique ad-sponsored IDs, and fewer song played and paid for). But Pandora may be trending in just the opposite direction, with fewer users who cost more money to serve.

  5. Pandora investors don’t seem worried at all, so iTR is the one that’s in dire trouble. Apple could so easily take a tiny amount of reserve cash and make iTR 10X better than Pandora, but I guess Apple doesn’t care one way or another. It still puzzles me how Pandora can stop subscribers from drifting to Apple, but what the hell do I know when it comes to investing. Wealthy and powerful Apple goes up against little Pandora and Pandora’s share price skyrockets. So much for the theory how a company’s share price should drop when more competition is introduced. I guess its only Apple’s share price that becomes affected in that manner.

    I absolutely enjoy listening to iTunes Radio and I’ve only had the occasional problem of a station stopping on its own and needing to be restarted. I have my i7 MacMini hooked directly to my HDTV and that’s how I listen and watch iTunes Radio and iTunes playlists. As far as I’m concerned, Pandora doesn’t even come close. I don’t care anything about lyrics and info. I just like to listen and relax. If Apple can’t make a dent in Pandora’s subscriber base then I have to say that Apple isn’t even trying to compete with Pandora.

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