Pandora Reaches 40 Million Active Users, Sees No Impact from On-Demand Services
Pandora Reaches 40 Million Active Users, Sees No Impact from On-Demand Services

Pandora Media on Monday officially expanded outside of its home territory in the United States, bringing its streaming radio service to Australia and New Zealand.

The Oakland, Calif.-based Internet radio company announced in a filing with the Securities and Exchange Commission that it had launched test versions of its service in both countries. It further disclosed that it agreed to pay "less than 25% of revenue" to songwriters and performers in New Zealand, but did not specify what its royalty rate for Australia would be.

Pandora chief executive Joe Kennedy told Billboard.biz in July when it introduced beta versions in those countries that the company launched there because, "We reached agreements with rights holders down there. As we've said before, that's really the gating issue in most of the world."

Pandora worked with the Australasian Performing Right Association (APRA) and the Australasian Mechanical Copyright Owners Society (AMCOS) in Australia and well as PPNZ Music Licensing in New Zealand to secure the rights to about a million tracks from more than 100,000 artists.

Australia was the world's sixth-largest music market in 2011, according to the International Federation of the Phonographic Industry's latest Recording Industry in Numbers (IFPI) report, while New Zealand ranked No. 32.

Australia, according to the IFPI, in 2011 posted:
Physical music sales of $260 million (world rank No. 6)
Digital music sales of $181 million (world rank No. 6)
Performance royalties of $25.8 million (world rank No. 8)

New Zealand in 2011 recorded:
Physical music sales of $32.6 million (world rank No. 30)
Digital music sales of $16.5 million (world rank No. 26)
Performance royalties of $6.4 million (world rank No. 24)

For Pandora, however, a more interesting set of data is the percentage of the population in each of these countries that have access to smart phones, where much of Pandora's usage occurs. In Australia, that number was 52%, according to an Ipsos report sponsored by Google. In New Zealand, the smart phone penetration rate was 44%, same as in the United States.

Of Pandora's 175 million registered users in the United States, more than 115 million have accessed the company's smart phone apps and more than 75% of Pandora's listening occurs on mobile.

"With the huge number of mobile device users in Australia and New Zealand, we anticipate fast adoption of our free mobile apps," Pandora founder/chief strategist Tim Westergren said.

The company hired Jane Huxley, the former head of digital at Fairfax Media, to be its local managing director. In addition, it announced a partnership with Holden, a General Motors company based in Melbourne, to integrate Pandora's service into vehicles via Holden's MyLink system.

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