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Pandora, now backed by SiriusXM, changing strategy?

July 7, 2017

By Chris Forrester

Streaming music site Pandora is reportedly going to wind down its push for more high-value subscribers, say researchers at Needham & Co. Pandora is now heavily under the influence of Liberty Media, which also controls SiriusXM.

Needham & Co’s Laura Martin, in a research note to clients, says with SiriusXM holding three of nine board seats, including the chairman role, “Sirius did a ‘take under’ and is now essentially in control,” and she added that it was likely that “the next CEO of Pandora to come from John Malone’s extensive rolodex,” referring to Liberty’s chairman, which suggests that the end result will translate into “the business acumen and negotiating skills” which will “take a big step up” at Pandora.

Martin adds that she believes Pandora’s thrust to roll out a music subscription service to compete with Spotify and iTunes will be wound down, and Pandora will be positioned to be a companion service to SiriusXM.

The Needham research note echoed a briefing report from equity researchers at investment bank Morgan Stanley on July 5th, saying that the departure a week ago of Pandora’s CEO Tim Westergren also heralds a change at the music streamer, with the thrust changing to emphasise the ‘free’ (but advertising supported) element of Pandora’s service. Morgan Stanley said that Pandora already wins a 10 per cent share of the radio listening market, yet only delivers around 5 per cent of the market’s ad-revenue, and thus suggesting plenty of head-room for advertising growth.

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