With Pandora CEO Brian McAndres dismissing Apple Music back in July as nothing to worry about, Pandora stock took an after-hours beating yesterday, falling by as much as 21 percent to just $15.25.
The reason? A poorly-received quarterly earnings report, thought to be the result of would-be customers trying (you guessed it!) Apple Music instead of the ad-supported Internet radio company.
The number of hours of music streamed by Pandora grew by a minuscule 3 percent in the last quarter, which is a fall of 25 percent from one year ago. The number of listeners also grew by 2 percent to 79.4 million, which is down from the 5 percent gain seen last year.
In all, Pandora recorded revenue of $311.6 million, which was below the $314 million predictions from Wall Street. It recorded a loss of 40 cents per share compared to profit forecasts of 10 cents.
This month, Pandora also confirmed that it will pay $90 million to settle a royalty payments issue related to pre-1972 music.
To be fair to Pandora, it was competing with Apple during the company’s three-month free trial period, which likely snapped up a lot of customers who will now return to other free services now that the trial period is over. Apple recently announced that it has around 6.5 million paying subscribers.
Still, it’s another illustration of why it’s best not to denounce whatever Apple’s latest product is. From the iPhone to the Apple Watch to Apple Music, we see this over and over again, and it never seems to end well for the people claiming Apple won’t be able to compete.
What is it they say about people who ignore history being bound to repeat it?
Source: NYPost
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
5 responses to “Pandora earnings hit a bum note thanks to Apple Music”
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I quit using Pandora and Spotify because they rip off the artist’s that make the music. I’m waiting for Apple’s music service to shake out.
Pandora does not rip off artists any more than FM radio does. I used it for 7 years and purchased tons of music thanks to Pandora.
Pandora may have taken a hit because of AppleMusic’s free three-month trial. Pandora’s next quarter could go back to normal. I believe quarter to quarter thinking is simply too narrow-minded.
Pandora missed revenue projections by 1.2M or around 0.3% (not sure where you got your numbers), also not really sure why people are alarmed. The loss was expected… they still have 400M in cash, and 80M users (more than Apple and Spotify). The 90M deal is also not surprising… they’re settling a legitimate lawsuit. All this “bad news” was deliberate to drive down the stock.