×

Pandora’s Premium Subscription Service Stalls Just Months After Launch

Pandora’s premium on-demand music service seems to have lost virtually all of its momentum just months after launching to the public in March. The company added just about 150,000 paying users to its premium subscription tiers during the tree months ending June 30, it revealed as part of its Q2 financial filing Monday.

Altogether, Pandora now has 390,00 subscribers of its $9.99 on demand premium tier, CFO and acting CEO Naveen Chopra said during the company’s Q2 call Tuesday.

That’s a far cry from the growth that industry leaders like Spotify have seen in the same time period; the Swedish music service revealed earlier on Monday that it had added 10 million paying subscribers in the past four months, and now has 60 million paying customers.

Pandora ended the second quarter with 4.86 million paying subscribers. That is a 24 percent year-over-year increase. But it’s nonetheless a disappointing result, especially in light of the fact that Pandora had boasted of 1.3 million trials for its premium services in Q1. It now seems that most of those trial subscribers never stuck with the paid service.

Pandora did beat analyst expectations in Q2, bringing in $376.8 million in revenue for the second quarter, an increase of 10% year-over-year. The company recorded a net loss of $275.1 million for the quarter, with a significant part of it being a one-time write-down of goodwill due to the fact that Pandora sold its ticketing unit Ticketfly at a loss in June.

Pandora announced a $480 million investment from SiriusXM in early June. Two weeks later, it announced that founder and longtime CEO Tim Westergren was leaving the company. 

Pandora has in the past invested significant amounts of money into the development into its premium service, which included the acquisition of the music streaming startup Rdio in November of 2015. Earlier this year, Pandora boasted that as much as 30 percent of its about 77 million monthly listeners would be strong candidates to become paid premium subscribers.

Company executives have significantly shifted their rhetoric ever since the SiriusXM acquisition, instead focusing on primarily growing the company’s ad business. Chopra said Monday that the company had shifted some of its marketing money to address these new goals, but said that the company still views paid subscriptions as “critical” to attract new and younger listeners.

The company had previously communicated a goal of ending the year with 6 to 9 million paying subscribers. Chopra declined to give any guidance on paying subscribers Monday, and said that the focus was instead in growing Pandora’s overall audience. “The view now is that we need to develop as big of an audience as possible,” he said.

More Digital

  • Nigeria’s Kunle Afolayan: African Audiences Shouldn’t

    Nigeria’s Kunle Afolayan: African Audiences Shouldn’t Be ‘Second-Class’

    DURBAN–A young boy from a middle-class home gets an unconventional schooling in the ways of the world when he’s forced to apprentice at a mechanic’s workshop in a rough-and-tumble section of Lagos. “Mokalik” is the latest feature from Kunle Afolayan, a leading figure in the wave of filmmakers revitalizing the Nigerian film industry. The film [...]

  • SAG-AFTRA HQ

    SAG-AFTRA Ends Long Strike Against Ad Agency Bartle Bogle Hegarty

    SAG-AFTRA has ended its 10-month strike against Bartle Bogle Hegarty after the advertising agency agreed to sign the union’s new commercials contract. The union instructed its 160,000 members in September not to accept any work for BBH, which had been signed to SAG-AFTRA’s commercials contracts since 1999. The strike came two weeks after BBH publicly [...]

  • FaceApp is displayed on an iPhone,

    SAG-AFTRA Warns Members About FaceApp Terms of Use

    SAG-AFTRA is warning its 160,000 members about the “overreaching and invasive” terms of use for the FaceApp mobile application. FaceApp, developed by Russian company Wireless Lab, uses neural network technology to automatically generate transformations of faces in photographs. The app can be used to make users appear older, younger, or change gender. The terms include [...]

  • J. Cole

    Apple Music Launches 'Rap Life' Playlist

    Apple Music announced the launch of “Rap Life,” a new global playlist focusing on contemporary rap artists and culture. It replaces the former “The A-List: Hip-Hop” playlist. Said Ebro Darden, Apple Music’s Global Editorial Head of Hip-Hop and R&B: “We flipped it to dig deeper into into the lifestyle [and to] keep pushing the culture [...]

  • Billie Eilish

    ARRI, Mobile TV Group Back New Venture Revitalizing Streamed Concerts

    A new venture looking to bring a fresh approach to live-streaming concerts has gotten the backing of hardware heavyweights ARRI and Mobile TV Group. Wide+Close is launching with the mandate of shooting music performances with film cameras and cinematographers in order to give the content a more cinematic feel. “We want to take concert filming [...]

  • Fortnite Battle Royale

    How 'Fortnite' Fans Can Earn Loot by Watching YouTube Videos

    Epic Games and YouTube have teamed up with a special offer for “Fortnite” players — giving players of the popular battle-royale game rewards when they watch “Fortnite”-premiered content on the video platform. The catch: You have to watch at least 20 minutes of “Fortnite” special content or live esports broadcasts to receive the loot. Under [...]

  • Roku headquarters

    Roku Plans to Expand to Brazil, Other Countries (EXCLUSIVE)

    Roku plans to expand to multiple new territories in the coming months, Variety has learned. One of the first new markets for the company will likely be Brazil. An international expansion could help Roku grow its customer base, which in turn should lead to growing advertising revenues. Roku executives have been hinting at plans to [...]

More From Our Brands

Access exclusive content