Pandora: Probably Tracking The Wrong Audience Metrics


Pandora media (NYSE: P), the internet radio service provider, released its audience metrics for the month of August 2013 yesterday. The company reported increases in all the metrics it actively tracks. Listener hours at 1.35 billion hours saw a Y/Y increase of 16% over august 2012 and the company also saw 6.38% increase in its market share of the total US radio market. The biggest jump was in terms of active listeners which saw a 28% Y/Y increase to hit 72.1 million. While the numbers definitely look encouraging one important metric which we believe the company should actively track is its revenue per active listener, which stood at $.74 for the quarter ended July 2013 growing over 21% on a Q/Q basis (refer table below).


The Pandora stock gained over 4.2% in the last trading session closing Thursday at $18.98.Though the ARPU has been seeing an upward trend, looking at a report on, growth in the US radio internet market is plateauing and it will only get tougher for the company to increase its market share in terms of Unique Users. We feel Pandora’s Unique Users is a key parameter the advertisers will be looking at. ARPU and the Unique users growth would be a far more accurate metric of the company’s growth and financial performance than the metrics the company currently reports every month (billion hours of listening).

To see Pandora’s latest stock price movement, click here (NYSE: P)

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Disclaimer: We do not hold any stake in the aforesaid stocks. For detailed disclaimer, please click here.

Virendra Singh Chauhan Virendra Singh Chauhan   on Amigobulls :

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