Pandora Offers On-Demand Listening to Free Users Who Watch Video Ads

Company hopes this will increase awareness for Pandora Premium.

Subscription News: Pandora Offers On-Demand Listening to Free Users Who Watch Video Ads

Source: Pandora

Expanding its offerings once again, Pandora (NYSE: P) now allows free users to access the company’s on-demand streaming music library after watching 15-second video ads. On-demand listening to free users was previously unavailable. Now, when a free user searches for a song, album or playlist, or asks Pandora to recommend one, the user can opt to watch a video spot to unlock a premium listening session. Pandora is offering the feature to introduce users to Pandora Premium, one of Pandora’s streaming music subscriptions. The new functionality is also available to Pandora Plus subscribers.

‘Our ad-supported listeners’ top request has consistently been the ability to directly play the specific songs, albums, or playlists they want,’ said Roger Lynch, Pandora President and CEO, in a press release. ‘These new features address that need by marrying rewards-based advertising with the best-in-class on-demand experience we’ve created with Pandora Premium. This unrivaled experience will drive listeners to Pandora and drive awareness for Premium, while also creating new opportunities for artists, labels, publishers and advertisers.’

Pandora describes three new features available to its ad-supported listeners:

  • Access to music on-demand after viewing a 15-second video ad.
  • Free listeners have a choice between on-demand listening by searching for music, or they can opt to listen to personal recommendations via Pandora’s Music Genome Project.
  • Pandora’s improved mobile app allows users to listen to uninterrupted music in the background on mobile devices or while multi-tasking in other apps.

‘Pandora continues to deliver product enhancements that create the ultimate music streaming destination for listeners, giving them more of what they want, when they want it,’ said Chris Phillips, Chief Product Officer. ‘The ability for our ad-supported users to search and play songs in our Premium product is game-changing not only for listeners, but also for artists and advertisers. For artists, it creates new avenues of promotion by providing fans with direct links to play their music. For advertisers, it offers new ways for brands to build trust and create value for their audience.’

Subscription News: Pandora Offers On-Demand Listening to Free Users Who Watch Video Ads

Source: Pandora

The goal of the new product features is to introduce free listeners to Pandora Premium with the hopes of converting them into paying subscribers. Pandora Premium is the newest Pandora subscription, available for $9.99 per month or $109.89 per year, after a 60-day free trial. With Premium, subscribers can search and play any song ad-free with unlimited skips and replays, create playlists or access curated playlists and download music for offline listening. This subscription product most closely resembles that of rivals Spotify, Apple Music and Amazon Music Unlimited.

The streaming music service also offers Pandora Plus, a subscription available for $4.99 a month or $54.89 a year, following a 30-day free trial. With Plus, subscribers get an ad-free experience and can access an unlimited number of personalized stations with unlimited skips and replays and listen to up to four stations offline.

Pandora Premium launched this spring. In its third quarter earnings report, Pandora said it had reached 1 million paid Premium subscribers, bringing its total number of subscribers to 5.19 million, a 29 percent increase year-over-year. It also reported subscription revenue of $84.4 million, a 50 percent increase year-over-year. Subscription revenue, however, only accounts for 22.3 percent of total revenue. Advertising revenue makes up the balance, now that Pandora has sold Ticketfly and no longer has ticketing service revenue. In spite of these positives, Pandora reported a GAAP net loss of $66.2 million, or ($0.34) per share for the third quarter of 2017.

Insider Take:

With new executive leadership (again), Pandora continues to expand its offerings for both listeners and advertisers, but these changes may not be enough to save the company from an acquisition. Pandora continues to post huge losses. Earlier this year Sirius XM made a $480 million investment in the company, but it may not be enough for Pandora to sustain itself either. We are eager to see the company’s fourth quarter earnings report to see if they are making significant strides toward reducing their sizable losses and what Lynch’s plans are for a comeback in 2018.