Business Matters: Pandora Growth Stalls As Dog Days of Summer Begin
Business Matters: Pandora Growth Stalls As Dog Days of Summer Begin

Pandora Listening Drops As Summer Advances
The growth of Internet radio leader Pandora is practically taken for granted as digital music gobbles up time previously spent listening to other formats. So it's a big deal when Pandora's listener hours actually take a step backward rather than forward.

The Internet radio service's listener hours fell slightly in consecutive months, reaching 1.08 billion in the June after rising to 1.1 billion in May from 1.06 billion a month earlier. To no surprise, the company's share price fell as much as 6.9% to $9.56 in early trading Tuesday but had leveled off at about $9.90 by midday and closed at $9.93.

The drop was actually "pretty understandable," CEO Joe Kennedy tells Billboard.biz. He says listener hours start to drop off in late May as students leave school and "intensifies in June." Another is the length of June -- 30 days compared to 31 in May. Even though listener hours dropped in June, the average listener hours per day in June of 36 million was actually higher than the 35.5 million listener hours averaged in the 31 days of May.

Music services have plenty of competition in the summer vacations and holidays. This should make sense to people in the music business. After all, there's a reason why few big albums are released in the summer and labels avoid putting out priority releases near major holidays (except for the fourth quarter).

The sequential drop in listener hours was Pandora's only deficit last month. Active listeners were up slightly from 54.5 million in June from 53.3 million in May. And, of course, Pandora's numbers are well ahead of last year. June listener hours were 77% higher than the prior-year period and active listeners were up 51%.

I reached out to SoundExchange to get its take. Surely the organization that collects webcasting royalties from companies such as Pandora would have an opinion on the direction of the Internet radio market, right? While SoundExchange policy prevents it from commenting on any individual webcaster, president Michael J. Huppe underscored the fact that Internet radio marketing continues to grow.

"What we can say is that SoundExchange has seen a healthy increase in the overall Internet radio market, as evidenced by our increasing payments in digital performance royalties to artists and labels," Huppe stated in an email to Billboard.biz. "It's also not uncommon for individual services to fluctuate in their listenership for a variety of reasons."

Investor worry makes some sense here. Slowing growth is one thing, but an actual decline is another. Much of Pandora's market capitalization is based on its prospect for long-term growth. The company has clearly put growth over profitability in recent years, engaging in a high-stakes land grab in these early days of Internet radio. If Pandora isn't growing, the other option is to create a profit for its shareholders.

And competition is out there. Pandora's announcement of a slight dip in listener hours came a day after SiriusXM Radio announced growth of 600,000 subscribers in the second quarter. More symbolic was the same-day announcement by Songza that its popular mobile app was now available for Android devices. Songza has not revealed a specific number for its monthly active users but has told Billboard it's in the "seven figures."

In spite this increased competition, however, Pandora's share of the top 20 Internet audio platforms as measured by Triton Digital increased to 71.2% in May from 70.8% in April. Second place Clear Channel also gained share, edging upward to 14.7% in May from 14.1% in April. Satellite radio company SiriusXM is not included in Triton's list of Internet radio services. ( Pandora press release)

Songza, Live Nation Debut on Android
Songza and Live Nation have both released Android versions for apps that have proven to be popular on Apple's iOS platform.

Songza's Android app is actually an update that includes the popular Concierge feature. Concierge acts like a music discovery aide that helps the listener choose a playlist based on the time of day, mood and activity. Songza has a web player but is basically a mobile-first service that is far better with Concierge than without it. User comments at Google Play's app store show the updated app is really impressing people. Overall, it has a 4.0 average from 748 user ratings including the earlier version.

Live Nation's Android app comes over a year and a half and over three million downloads after the iOS version was debuted. The app provides access to Live Nation concerts, Ticketmaster-ticketed events and additional independent shows in North America. Ticketmaster's iOS app debuted in February of this year.

PayPal Cuts Off File Sharers
One of the next major tactics in the media industry's battle against piracy is cutting off the money of targeted services. As TorrentFreak reports, PayPal has cut off some of the world's biggest file-hosting sites in recent weeks. The online payment company has stopped working with MediaFire, Putlocker and DepositFiles due to piracy concerns. In the case of UK-based Putlocker, the company's owner told TorrentFreak, the two parties' relationship ended after PayPal insisted in monitoring uploaded files and user queries. ( TorrentFreak)