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Pandora Q1 2013 Results Show How Mobile Platforms Make the Monies

Take notes, Facebook. Take really good notes.

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Pandora Q1 2013 Results Show How Mobile Platforms Make the Monies
[ Social Media]

Pandora’s financial results for the first quarter of the 2013 fiscal year are out and all signs point to ‘yes’ for the internet radio service. The company’s total revenue of $80.8 million is up 58% from last year with ad revenue making up $70.6 million, a 62% increase over the same time period. Pandora raked in the other $10.2 million from subscriptions and other sources.

Pandora also achieved a record 51.9 million active users, a 53% boost from this time last year when it boasted 34.0 million. The company recently celebrated its crossing of 150 registered users, 70% of whom are steadily enjoying Pandora through some kind of mobile device. Unsurprisingly, the future of Pandora’s continued success is targeted toward its mobile platform although its looking to monetize its other platforms, too (really, why wouldn’t they?), and with the 3.09 billion hours listeners spent streaming Pandora in the past year, that’s a rich opportunity for advertisers.

And if those listening hours are happening on mobile devices, that’s likely where advertisers will pursue them. “Advertisers want to be everywhere their consumers are,” said Joe Kennedy, Chairman and CEO of Pandora, in a statement. “They are moving quickly to speak with their target customers across the Pandora platform, with the majority of the top 50 digital advertisers in the U.S. already having bought multiplatform advertising on Pandora.”

With much of Pandora’s success flowing in from its ability to monetize the mobile experience of users, some who keep a studied eye on the industry are speculating on how this business model could be advantageous to Facebook. The social networking colossus has acknowledged problems with making money off its mobile platform, which could be problematic for the company given the majority of users are accessing Facebook via mobile devices these days.

The ability for Pandora to parlay its mobile platform into a strong source of financial revenue doesn’t necessarily mean that Facebook’s going to be able to ape the internet radio service’s model, namely because there’s a huge design difference between the two sites. As Rocco Pendola of The Street points out, people are going to Pandora to listen, not to watch or read. The lack of visual content leaves a nice, neat canvas for displaying ads.

Contrast that design with Facebook, which is a service built on providing visual content. When you’ve got an already-crowded news feed crammed with social readers, photos, status updates, and whatever else people are posting to Facebook, there’s relatively little room to squeeze in an ad when you’re viewing the site on the four-inch screen of a smartphone.

The design of Facebook is simply at an inherent disadvantage when it comes to mobile advertising. Even with the consideration of sponsored stories that are inserted into users’ news feeds, there’s not really a feasible way to display ads in Facebook’s current mobile platform. Short of creating news feeds that are narrated by some weird voice recording – lord, can you imagine how awful that would be? – that would open up some space for advertising, there’s not much else Facebook is going to be able to do.

However, if Facebook does manage to re-invent its mobile wheel and find a way to make its mobile platform profitable, expect much of the company’s inspiration to be gleaned from what Pandora has managed to achieve with its marketing strategy.

Pandora Q1 2013 Results Show How Mobile Platforms Make the Monies
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  • http://www.claytoncomputer.net Steved314

    I really like Pandora’s business model. The best app to be made in a long time.

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