×
You will be redirected back to your article in seconds

Pandora Shares Surge as Fourth-Quarter Subscription Revenue Climbs 63%

Pandora reported mixed financial results for the fourth quarter of 2017, but its shares jumped more than 9 percent after it reported a substantial growth in subscription revenue.

The company reported a 63% increase in subscription revenue, bringing its yearly total to $97.7 million. It also reported 5.48 million subscribers, up 25% year over year, and CFO Naveen Chopra said on an earnings call Wednesday that 300,000 subscribers were added in the fourth quarter — and noted that tally does not include trial subscriptions.

It also reported a savings of $45 million resulting from “an organizational restructuring designed to prioritize its strategic growth initiatives and optimize overall business performance,” which was announced in January and included the layoff of 5% of its staff, and said it intends to direct those savings toward new growth initiatives like ad-tech, non-music content, device integration and marketing technology, and further develop its Premium Access (on-demand) services in response to competition from Spotify, Apple Music and other streaming companies.

On the earnings, call CEO Roger Lynch (pictured above) — who joined the company just six months ago — acknowledged ongoing challenges and said that it is “not going to bend the curve overnight,” but said it has made solid progress. He and Chopra used the word “bullish” several times during the call, stressing the company’s progress in reorganizing and its path to growth primarily via its recently launched Premium service, its strong advertising base and its ventures into non-music programming like podcasts and voice-activated speakers.

“We are the largest streaming audio provider in the U.S. and the largest publisher of digital advertising,” Lynch said. “Digital audio is on the verge of massive growth — we expect one out of every two people will have a connected device in their home by 2022.”

He spoke at length about the company’s Premium service. Asked by a reporter about the reasons why subscribers leave Pandora, Lynch cited surveys with former listeners who said that the absence of an on-demand music option was a major cause: “We solved that on December 19 when we launched Premium Access,” he said. “We plugged that hole.” He also promised to increase advertising and awareness around the Premium Service, as in previous interviews he has said that the company’s messaging around that service could be stronger.

He spoke about the company’s strengths in advertising, noting that the data it possesses on “hundreds of millions of users in the U.S.” can be used for marketing technologies, furthering his goal of “personalized marketing at scale” as a concept for what they plan to do in the future. He also said the company will be increasing its presence in Atlanta, which is not only one of the country’s strongest music cities but also provides less-expensive talent pool than its base in the San Francisco Bay Area.

According to a press release, for the quarter, the total consolidated revenue was $395.3 million, an approximate 7% year-over-year increase compared to the year-ago quarter, excluding Australia, New Zealand and Ticketfly (last year, the company discontinued its operations in those countries, and sold the ticketing company at a loss). It had 74.7 million active listeners at the end of the fourth quarter of 2017.

For the full year 2017, consolidated total revenue was $1.467 billion, a 6% year-over-year increase. This included ticketing revenue of $76.0 million from the period. Excluding revenue from Australia, New Zealand and Ticketfly, full year 2017 revenue was $1.385 billion, an 8% year-over-year increase. This included advertising revenue of $1.071 billion and subscription and other revenue of $314.3 million.

 

More Biz

  • Merlin Reports Record Distributions for 2019

    Merlin Reports Record Distributions for 2019

    Global indie-label collective Merlin reported record distributions in its 2019 membership report, paying $845 million to label and distributor members between April 2018 and March of this year. That figure, a 63% year-over-year increase, includes more than $130 million paid out this year from non-royalty income — and included in that figure is the estimated [...]

  • Dwyane Wade on Supporting His Son

    NBA Star Dwyane Wade on Supporting His Son's Attendance at Miami Pride

    NBA star Dwyane Wade spoke to Variety about why it was important for him to support his younger son attending a pride parade last spring. In April, Wade’s then 11-year-old son Zion posted pictures of himself at Miami Pride, with his siblings and stepmother Gabrielle Union. Wade, who was on the road with the Miami [...]

  • Songs for Screens: Eric Church Teams

    Songs for Screens: How Eric Church Teamed With Ram Trucks — and Five Tons of Vinyl — for ‘Solid’ Campaign

    Country star Eric Church has long used his new music to reward his loyal fans, from surprise releasing 2015’s “Mr. Misunderstood” album as a direct fan-club exclusive to impromptu meet-and-greets before his hometown show in Greensboro, North Carolina. So when Church was prepping the April vinyl release of 2018’s critically acclaimed “Desperate Man,” the singer [...]

  • Harvey Weinstein legal team

    Harvey Weinstein Loses Another Defense Lawyer

    Harvey Weinstein has lost another defense lawyer, just three months before he is set to go on trial for rape and sexual assault. Attorney Jose Baez told the judge overseeing the case that Weinstein had taken actions that made it difficult to represent him, according to a letter obtained by the New York Post. Baez [...]

  • https://pmcvariety.files.wordpress.com/2019/06/kindred_spirits_2019_v7.jpg

    Kindred Spirits Host Fundraiser for Child Refugees

    The Kids Entertainment Professionals for Young Refugees will host its third annual Kindred Spirits fundraising campaign this month on behalf of UNICEF and in coordination with World Refugee Day, which is Thursday. The grassroots, volunteer organization’s online fundraiser will take place from June 14-27, and 100% of every donation made will benefit UNICEF. “We call [...]

  • Vid Angel

    VidAngel Hit with $62.4 Million Judgment for Pirating Movies

    A jury on Monday ordered VidAngel to pay $62.4 million to Disney, Fox, and Warner Bros. for streaming hundreds of movies on its service without permission. The verdict is potentially a death blow to the Utah-based company, which sought to allow family audiences to watch Hollywood fare while skipping past violence, sex, and other objectionable [...]

  • Nicholas Sparks

    Nicholas Sparks Apologizes, Explains Opposition to LGBT Club

    Romance writer Nicholas Sparks issued an apology on Monday for remarks he made in 2013 opposing the formation of an LGBT club at his Christian school. In an email published last week by the Daily Beast, Sparks faulted Saul Benjamin, who was then the headmaster of the Epiphany School of Global Studies, for pushing an [...]

More From Our Brands

Access exclusive content