For the first time since Apple's iTunes Radio launched in mid-September, Pandora has surpassed the number of unique listeners that it attracted that month. The leading music streaming service drew 76.2 million active listeners in December, 13% ahead of where it was a year earlier. This also breaks Pandora's record of active listeners established three months earlier.
Pandora bears have been arguing that Apple's similar ad-supported free streaming service platform is eating into the market. It certainly seemed to play out that way at first when Pandora saw active listeners dip from 72.7 million in September to 70.9 million in October. The sequential dip wasn't a seasonal thing, as the listener number had moved higher in prior years. Clearly the arrival of iTunes Radio two weeks into September was weighing on its magnetism. Pandora's draw improved to 72.4 million unique listeners in November, but it was still short of September's tally.
The silver lining during October and November was that the average Pandora listener was tuning in longer, but it was naturally going to be problematic if the audience had peaked in September. As of this morning we know that it did not happen. Pandora's 76.2 million active listeners at the end of December point to a company moving in the right direction again.
Apple doesn't provide comparable monthly metrics, but it had no problem bragging about serving up 1 billion tunes to 20 million listeners during its first several weeks of availability.
Pandora isn't the speedster that it used to be. Listener hours and active listeners in December rose just 13% over the past year. However, Pandora's gotten much better at milking more ad and subscription revenue out of its fan base. Revenue climbed 50% in its latest quarter even though Pandora served up just 17% more content. These dynamics should help deliver strong top-line growth at Pandora in the near term.
Apple's arrival may have led a few curious PC and iOS users to kick the tires of iTunes Radio, but Apple has likely expanded the potential market for streaming services by validating the medium and educating the masses. Apple is also likely helping Pandora by justifying advertisers' paying up to place 15- and 30-second audio ads in music streams. A new in-car advertising platform that Pandora is launching today will also keep the streaming star growing.
The beat goes on at Pandora.