×

Pandora Will Sell Ads for SoundCloud in the U.S. Under Exclusive Pact

Audio-streaming platforms reach more than 100 million unduplicated listeners in U.S.

Audio-sharing platform SoundCloud and Pandora are joining forces in the U.S., inking a deal making Pandora the exclusive advertising and sales rep for SoundCloud in the States.

The agreement, bringing together two large streaming-music players, is set to commence in 2019. SoundCloud and Pandora have a combined U.S. audience of more than 100 million unduplicated listeners, with just 13% overlap between the two companies. Under the partnership, marketers will be able to purchase SoundCloud’s U.S. ad inventory directly through Pandora as well as tap into its targeting data and programmatic-advertising system.

The new agreement expands SoundCloud’s existing global relationship with AdsWizz, the audio-advertising tech company Pandora acquired earlier this year for $145 million.

SoundCloud, founded in 2007, made the transition last year from a free service to a partially paid one. In mid-2017 the New York-based company was running short on cash — and in danger of closing its doors — before receiving a $170 million lifeline from Raine Group and Singapore-based investment company Temasek in August 2017. SoundCloud also named Kerry Trainor, formerly Vimeo’s CEO, as chief exec.

Pandora, meanwhile, is the target of a takeover bid by SiriusXM valued at $3.5 billion. But SiriusXM investors reacted negatively to the proposed all-stock deal, pushing its shares down 10% and implying a deal price below Pandora’s share price prior to the deal’s announcement. Wall Street analysts expect Pandora and SiriusXM to renegotiate terms — or potentially that Pandora will find a higher bidder.

Given that the exchange ratio is fixed, the sell-off in SiriusXM shares in Monday’s trading session (to $6.26, down 10.3% for the day) implies a deal price of $9.01 or so, which is a discount of 0.8% to Pandora’s closing price on Friday of $9.09. We think that shareholders will reject the deal as inadequate, and will require the terms of the deal to be re-negotiated. The agreement includes a “go-shop” provision that allows Pandora and its Board of Directors to explore other proposals.

The market opportunity for audio ads is expanding, thanks to the rise of streaming music, podcasting and smart speakers. According to research from trade group Interactive Advertising Bureau, digital audio advertising hit $1.6 billion in 2017, up 40% year over year.

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 [...]

More From Our Brands

Access exclusive content