By Acting More Like Radio, Pandora Can Sell Advertising
Pandora Media will become a successful Internet radio service by acting more and more like a radio company. In order to be a radio company, you need to use metrics common in the radio business. In order to sell radio advertising, a company needs measurements familiar to ad buyers.
As of last week, Pandora is being measured by Triton Digital on both a national and a local level. Triton's data say Pandora is the biggest radio network in the 18 to 49 demographic with a cumulative audience, or cume, of 23.87 million (which is slightly bigger than Premiere Radio Network's Young Influencers Network of 23.7 million in March, according to Arbitron). Pandora has a 71% share of Internet radio listening among the top 20 stations and networks in the U.S., according to Triton.
Edison Research previously handled measurements of Pandora's webcasting activity. Triton's data is different mainly because it reflects real-time measurements whereas Edison validated Pandora's streaming data.
Triton announced on May 10 it would start providing data on average quarter-hour ratings by market. "This will allow subscribers the flexibility to combine their offline and online audience into a credible total audience number while maintaining the ability to position the attributes of either channel independently," the company explained in a press release. In other words, Triton's measurements speak to advertising buyers in a familiar language.
Pandora chief revenue officer John Trimble tells Billboard.biz the Triton measurements "further validates our position" and is a "game-changer" in how Pandora is viewed in the marketplace by brands and advertisers. Triton's numbers provide a metric comparable to that of terrestrial radio even though Triton measures only Internet digital. Triton helps by establishing a solution that works for both terrestrial and Internet radio.
"It really starts to provide a big opportunity to have that apple-to-apple conversation," says Trimble, adding that clients and advertising agencies have pushed for this initiative because they have a need for comparable data.
Expect these developments in webcasting measurements to be a topic during Pandora's Wednesday afternoon earnings call for its first fiscal quarter ended April 30. The company has expanded its local and national ad sales teams and has been making a concerted effort to describe to analysts its long-term strategy for growing revenue by taking a chunk of the radio advertising market away from traditional broadcasters.
Hastings is Latest Company to Blame Low Earnings on New Music
Hastings' music sales declined 9.4% in the first fiscal quarter of 2012. In its earnings release, the entertainment retailer blamed the decline in new and used CDs due to "a shift in sales to lower priced promotional product, along with a weaker slate of new release music during the current quarter." The games category declined 21.3% and movies fell 3.7%. The company's net income was $800,000, up from $400,000 in the prior-year-quarter. ( Press release)
Financial Times Calls Sony Music & Pictures Valuable, Underappreciated
The Financial Times has called on Sony to sells its entertainment assets -- sort of. Andrew Edgecliffe-Johnson argues that investors are undervaluing Sony Music and Sony Pictures by giving all of Sony a market capitalization of $14 billion. Based on recent prices fetched by Warner Music Group and EMI Music, and considering Sony Pictures' revenue ($8 billion in 2011) and operating income ($416 million), the two divisions "could bring in $10bn or more," writes Edgecliffe-Johnson. Inside the large and diverse Sony Corp., however, the value of Sony's music and film divisions are hidden and underappreciated.
The timing may not be right, however. Edgecliffe-Johnson concludes Sony Music and Sony Pictures probably aren't going anywhere -- entertainment M&A has been slow and entertainment companies have not fetched good prices when standing apart from their conglomerate owners. "But unless it can convince investors of their value or show rapid evidence of an electronics turnround, it should [sell the two divisions]," he concludes. "Even if head office has no use for the cash, investors might like it back." ( Financial Times)
iHeartRadio Gets Makeover, Further Differentiates From Pandora
Clear Channel's iHeartRadio.com got a facelift. The web-based version of the Internet radio service will get a "My Stations" tab for quicker access to favorite stations, a "Discovery Tuner" that allows the listener to choose between more or less familiar artists, an improve search function and new drop down menus meant to improve browsing.
The contrast between iHeartRadio.com and Pandora has become clearer. iHeartRadio is part music portal (there's currently a link to an interview with John Mayer), part radio service and part promotional platform for Clear Channel (the home page features information on the iHeartRadio music festival). As a result, only three personal stations can be accessed with a single click and multiple clicks are often needed to start listening. Pandora appears to want listening to music to be incredibly easy, and getting to any one of a dozen personal stations on Pandora requires just a click. ( iHeart.com)