Music streaming giant Pandora Media suffered a thumping fall in its share price November 3rd, by a worrying 27 per cent, following an earnings statement where Q3 revenues disappointed the market and ad-income was flat.
The shares hit an all-time low of $5.37. Pandora is backed by pay-radio operator SiriusXM, which paid a total of $480 million for 19 per cent of the company.
Pandora, for the past six weeks run by former EchoStar Sling Media executive Roger Lynch, reported impressive gains of subscribers (up 29 per cent) and 50 per cent in terms of revenues ($84.4m). However, ad-revenues grew just 1 per cent to $275.7 million. Active listeners were 73.7 million during the quarter, down from 76 million in Q2, and 77.9 million in last year’s third quarter
Pandora is already exiting its Australia and New Zealand divisions.
Lynch told analysts: “There’s a very significant shift happening in how people access audio content. Digital audio, which used to be limited to mobile devices and the web, is now exploding into new forms of listening, integrated into new smart devices, connected homes and auto all of which is beneficial for Pandora.”
Admitting there was no ‘silver bullet’ to address all the challenges overnight, Lynch said: “In the case of music what we’re seeing is there is a segment of the market that is moving towards premium subscription services like [ours]. Pandora was late to go after that segment, but now we’re in the market, so that with a product that we’ve launched very recently and is still maturing. I think that there’s a lot of upside for that business. One thing I will say that was if you look at where the premium level, so call it the $10 subscription tiers are moving within the US, what you see is a big shift that’s happened over the last several years to family plans and to student plans.”