Apple Music takes a huge bite out of Pandora

“Shares of Pandora Media have been utterly decimated, down by as much as 40% at the low, following a dismal earnings release,” Evan Niu writes for The Motley Fool. “While revenue put up a seemingly impressive 30% increase to $311.6 million, the company’s losses completely exploded. We’re talking about $85.9 million in red ink, or $0.40 per share, which is quite a bit worse than the $2 million net loss a year ago.”

“To be fair, most of this loss can be explained by a one-time settlement that Pandora negotiated with the record labels during the quarter. Pandora has agreed to a $90 million settlement related to using songs created before 1972. This is the primary reason why content acquisition costs skyrocketed in the third quarter. Pandora is recording the charge now, paying $60 million this month, and paying the rest in installments throughout next year,” Niu writes. “Worse yet, Apple launched its new Apple Music streaming service right as the quarter started, which does make the sequential comparisons that much more potent.”

“Monthly active listeners inched 2% higher to 78.1 million, while listener hours increased 3% to 5.14 billion. But those are year-over-year comparisons that Pandora is citing, and a sequential comparison is likely more relevant at this point considering the launch of Apple Music,” Niu writes. “Pandora has now given back much of those gains, and it lost 1.3 million active listeners sequentially.”

Read more in the full article here.

SEE ALSO:
Apple is going to put the hurt on Pandora – November 10, 2014

28 Comments

    1. Revenue is up by 30%. So subscribers have either remained or increased, right?

      Losses are from a write down. It’s not if Pandora is loosing business, its, “Can they recover from increased costs?”

      Their free&reduced lunch is over. School is in session.

    2. Ya right MDN, Pandora hasn’t suffered any major losses. If you read the damn financials and listen to the CEO, their growth slowed in the quarter and they expected it because of Apple Music’s launch. But as they said, it was “muted” and effectively identical to when Apple launched Apple Radio.

      We’re talking 1 million listeners and that’s in the context of LESS growth, not less people. Pandora continues to gain subscribers. They’re growing, and Apple hasn’t stopped that.

      So no, Apple Music simply has NOT taken any huge bite out of Pandora. Patently false.

      Tim Cook said Apple had 6.5 million paid subscribers. Are those retained listeners? How many of those got charged without them wanting to be charged and have now dumped the service? None of those questions are answered.

      Pandora has over 250 million registered users. So let’s cut the crap MDN.

        1. See, here’s the thing about Donald Trump. He is a media darling, a media maven. Always has been. Knows people tune in for the experience and gives it to them. Reminds me of Ronald Reagan but on steroids. What the hell is wrong with the other presidential candidates? Don’t they have minds of their own, like Trump? They trust their handlers, defer to their old-school media consultants. Trump uses Twitter brilliantly. He channels his own self; damn the torpedoes and full speed ahead. Sure there are other, more important factors in choosing a leader, but sweeping aside the wearisome parade of weasels seems worthwhile, worth a gamble, just like 1980.

  1. I used to be a paid Pandora subscriber. Now I’m a paid Apple Music subscriber instead. It just didn’t make sense to continue to subscribe to Pandora when Apple Music does everything Pandora can do (radio stations based on song, artist or album) plus much more. Apple Music is like dream Pandora…it fixes everything wrong with the Pandora model. As a paid Pandora subscriber I got to listen to music without ads, but I still couldn’t choose exactly which song I wanted to listen to and when, I could only skip 6 times in a row, could never rewind or re-play, couldn’t add songs I liked to a playlist to listen to later, and couldn’t download songs I liked to my phone for offline listening. Pandora just isn’t offering a value compared to Apple Music.

    1. Jooop: best detailed/positive “review” I’ve seen of AM. If you don’t mind, I’m curious of your demographics?
      I’m an Apple fan, but not close to considering an AM subscript and wonder if it’s middle age, or frugality and stands in my path?

  2. I like Apple Music. I have no basis for comparison, because I did not (extensively) play streamed music before. I mostly use it at home on my iPod touch. It’s convenient to go to the “For You” section, find an interesting playlist, and carry my (VERY light and slim) iPod touch around while doing other stuff at home. Yes, I could do that before using my personal iTunes library, but I had to create and maintain playlists, and the music “got stale” over time (even with the Genius feature).

    Just that one usage makes it worth less than $8 per month. It’s “less than $8” (not $9.99) for me because I find iTunes gift card deals at 75-80% discount, good for all Apple digital media purchases including the Apple Music subscription.

    That’s the thing media “experts” don’t seem to get. You don’t have to love “everything” about Apple Music; it does quite a lot. At first, I was trying to use “everything all the time” to justify the subscription. But over time, I found it’s that “one thing” that makes it worthwhile (and everything else is a bonus). 🙂

  3. > have been utterly decimated, down by as much as 40% at the <

    Utterly indeed… This is mathematical bollox: 40% would "quadra-decimated" if done in one go or tri-decimated if achieved in three decimations. Some words do retain useful meanings in the face of sloppy usage.

    1. Based on the current usage of “decimate,” I thought the original meaning was reduce TO one-tenth, not reduce BY one-tenth. 🙂 (Like for “decimeter” and “decimal”)

      1. From Merriam Webster:

        decimate
        verb dec·i·mate \ˈde-sə-ˌmāt\
        : to destroy a large number of (plants, animals, people, etc.)

        : to severely damage or destroy a large part of (something)

        Full Definition of DECIMATE

        transitive verb
        1
        : to select by lot and kill every tenth man of
        2
        : to exact a tax of 10 percent from
        3
        a : to reduce drastically especially in number
        b : to cause great destruction or harm to
        — dec·i·ma·tion \ˌde-sə-ˈmā-shən\ noun

  4. Enzos – You are the sloppy one here…..

    It is quite obvious the author is making an analogy comparing a decrease in a cow’s milk production to Pandoras fall off today. The is disease is referred to as Milk Fever. So enough of the bolloxed behavior.

  5. There’s a lot of idiocy on the MDN takes regarding just about everything.

    Don’t give the old stock manipulation barf after the earnings report. I see Apple stock at about $120.00. Should go back down to $111 after another good quarter.

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