I read something this morning that was shocking, but then made more sense as I thought about it. Pandora is still growing. It grew 76% in the past year, actually. That percentage is in listening hours. The actual number of listeners has only grown 48%. What does this say?
- Spotify, Rdio, and like streaming services aren’t growing as quickly as we thought
- Listening hours are increasing at a faster rate within Pandora than its user base; more of its demographic is on the go and prefers online radio on smartphones, and/or people are neglecting their libraries more
Don’t get me wrong – Spotify will continue to be extremely relevant, and will grow. However, the majority of online culture which is not consisting of hardcore music nerds feels no need to switch over to Spotify. If it ain’t broke, don’t fix it , right? If streaming services wish to grow faster, they need marketing strategies that apply to more than just music nerds. Their new free no-subscription necessary smartphone radio is a good step in that direction. Also, Pandora’s (a publicly traded company) most recent quarterly report, while reporting boosted liquidity, has yet to get out of significant net losses on its income statement. Time will tell how sustainable this is.