Music discovery and listening app, Pandora, made progress in 2016. The company’s latest revenue increased 17% to $392.6 million.
Advertising revenue jumped 16% to $313.3 million, whilst subscriptions rose 5% year-on-year to $59.8 million. Despite beating expectations, its stocks fell 4% in after-hours trading, because investors had expected something even bigger.
However, net losses in the fourth quarter 2016 were four times as high as in 2015 at $90 million.
Tim Westergren, CEO of Pandora said in a statement:
“We enter 2017 laser-focused on the growth of our ad-supported business, the launch and growth of our subscription products, and an artist-to-fan platform to drive listener engagement and ticket sales. These three strategic pillars operate in harmony to create mutually reinforcing revenue streams across a large and growing addressable market.”
Even though total active listeners dropped slightly from 81.1 million in 2015 to 81 million in 2016, subscribers grew 12% to 4.38 million.
Pandora is essentially a free music app, but the company recently rolled out its Plus model to monetise its music streaming services by offering consumers the choice to skip tracks and listen offline.
The company hopes this will align it more closely with Apple Music, Amazon and Spotify.
It is now preparing to launch an on-demand Premium service next month. This could potentially boost the platform and help continue to grow its revenue.
In an earnings call, Westergren confirmed that the launch would be a major event for Pandora, but that “ultimately, it’s about the quality of the product. I think the reason that you’re not seeing the kind of growth that some people anticipate that the products are very hard to use. We really don’t think there is a true premium product on the market yet. We think Pandora will be the first premium product.”
Pandora hopes that it can match Spotify’s 43 million subscribers by having between 6-9 million using its Plus and Premium platform until the end of 2017.
In addition, Westergren said that the company had improved licensor relations significantly with labels and publishers.