Pandora’s new CEO Roger Lynch used his first earnings call with the company Thursday to lay out his vision for getting Pandora back on track. A key focus will be to make Pandora’s free, ad-supported service more appealing to both consumers and advertisers, said Lynch.
“Pandora is very much a business in transition, and there are tangible challenges,” Lynch said. Some of those challenges were on display in the company’s Q3 earnings report, which saw monthly listeners, listening hours and ads sold decrease.
Pandora still managed to grow its total advertising revenue as well as its subscription business, leading revenue to grow to $360.2 million, excluding the ticketing business that the company recently sold. Pandora registered adjusted net losses of $66.2 million. Investors had clearly hoped for better results, sending the stock down 11% in after-hours trading.
Lynch tried to go out of his way to show investors that the company is addressing their concerns. He acknowledged that there is “no silver bullet” for Pandora, but said that the company would focus on both returning to user growth, and grow advertising revenue through better ad tech. “If we’re able to do these things in tandem, I believe we will see shareholder value start to build throughout 2018 and beyond,” Lynch said.
One of the things Lynch wants to use to get people to tune in more often is non-music programming. Pandora struck a partnership to stream “This American Life” and “Serial” some 18 months ago, and Lynch said that he’d want the company to add more such programming.
“New forms of content — like podcasts, spoken word, and traditional radio — will expand engagement with our existing audience and attract new and lapsed listeners,” Lynch said. He signaled that such a move would also make economic sense since royalties will be lower than for music programming.
To actually monetize those listeners better, and grow the number of ads served, Lynch is planning to invest in better ad tech for the company. “One consistent theme I’ve heard from advertisers is that we don’t have all the features they need to easily transact with us and drive their campaigns,” he said. “And this is starting to have a material impact on our revenue.”
Lynch said that the company may either invest to build new ad tech in-house, or acquire companies to solve the problem more quickly.
Lynch, who previously helmed Dish’s Sling TV service, took over as Pandora’s new chief executive in September. The company parted with founder and CEO Tim Westergren in June following a $480 million investment from Sirius XM.
Westergren had been instrumental to the launch of a new premium subscription service, with the goal of allowing Pandora to more directly compete with Spotify and Apple Music. On Thursday, the company revealed that Pandora Premium now has more than 1 million paying subscribers.