RAIN 6/6: Forty-two percent of Pandora's audience listens solely via mobile, comScore finds
PANDORA HAS 35% REACH AMONG SMARTPHONE USERSLate last week Internet traffic measurement service comScore released it inaugural “Total Universe” report as a “beta.” The report credits Pandora for attracting 31.8 million unique visitors in April, with nearly 13.4 million of that total (42%) listening solely via mobile platforms. Pandora’s reach among home and work computers was 9%, bounding to 35% among smartphone users.
Keep in mind that just over 30% of Americans use smartphones, and under 5% use tablet devices. But comScore suggests, “The growth drivers are undeniable… Increased penetration coupled with the explosion of optimized content and services will change the digital landscape.”
ComScore announced the Total Universe program back in April, defining it as “audience measurement for 100% of a site’s traffic, including usage via mobile phones, apps, tablets and shared computers such as Internet cafes.” See the press release for the Pandora figures here.
REUTERS: PANDORA $1.3b VALUATION “LOOKS EXUBERANT”Reuters offers a sobering analysis of Pandora’s newly-released IPO terms (RAIN coverage here). “Despite Pandora’s impressive growth, its valuation [of around $1.3 billion] looks exuberant,” the news service writes.
One reason why is the well-known fact that “the more people who listen, the more royalties the company pays for music. As a result, total operating expenses move up nearly in lockstep with sales.”
Reuters also compares Pandora’s valuation to Sirius XM (which “trades on an enterprise value of about 3.8 times estimated 2011 revenue”) and the acquisition price of Citadel (3.2 times). “Split the difference, generously assume Pandora’s top line doubles again this year and the company would be worth less than the low end of its IPO price range.” You can read the full Reuters analysis in the New York Times here.
RAIN ANALYSIS: The flaw in the analysis of these bloggers is that when they’re comparing enterprise value multiples, they’re comparing a fast-growing new company (Pandora) to mature older companies (Sirius and Citadel), which is not a reasonable comparison.
One point I’ll grant: Pandora will never be a great business in terms of profitability as long as Internet radio has to pay music royalty rates (composition and recording) that are, in aggregate, 4 to 10 times higher than those of other forms of radio (e.g., satellite radio). But that disparity makes no logical or public policy sense, and someday, it’s reasonable to believe, Congress will equalize it more fairly. — KH
ESPN 980 IMPOSES 24-HOUR DELAY ON PODCASTS TO “PROTECT” STATIONESPN 980 in Washington D.C. began imposing a 24-delay for its podcasts last Friday. “We’re trying to get people to listen on the radio,” said ESPN 980’s director of programming Chuck Sapienza. “The more people who download podcasts, the fewer people who listen on the radio.”
“Not surprisingly, some people were upset,” writes the Washington Post (here), pointing out that there was even a Twitter hashtag campaign launched in response to the move.
APPLE KEYNOTE KICKS OFF AT 1PM EASTERNA new label-approved music cloud service? Updates to the iPhone? Maybe even a brand new iPhone? We’ll be watching to see what Apple chief Steve Jobs has up his sleeve during his WWDC keynote, which begins at 1PM Eastern today.
RAJAR TO OFFER WEB-BASED DIARIESUK radio ratings body Rajar starting next month will allow listeners to fill out their diaries online. The move mimics Arbitron’s recent announcement that it too is eying a move to web-based diaries (RAIN coverage here). Though the Guardian calls it “the smallest of reforms” (here), Rajar’s chief says its “probably the biggest event in Rajar’s history in terms of data collection.”
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