Pandora shared its Q2 report on Monday, and even though music streaming is exploding globally, this streamer's active user numbers remained flat at 76 million. Wall Street applauded, however, since the company reported better than expected returns and signs of growth in revenue, paid subscriptions and average monthly listener days.
Key Pandora Q2 User Base Metrics:
Total monthly active users = 76M (reported last quarter = 76M)
Total paid subscribers (across Pandora Plus & Premium) = 4.86 million / 24% YoY increase
Listeners tuning in an average 26 days per quarter / approx 23 hours per month
Continues to rank #1 as highest trafficked mobile brand over Spotify, SoundCloud and YouTube (comScore, June ’17)
Key Financial Metrics:
Q2 revenue was $376.8 million / 10% YoY increase – above the high end of our guidance range of $360 million to $375 million
Adjusted EBITDA loss was $54.3 million – above the midpoint of our guidance range of $65 million to $50 million
Q2 ad revenue was $278.2 million / 5% YoY increase (local ad revenue made up more than 30% of this)
Q2 subscription revenue was $68.9 million / 25% YoY increase
"We have taken a number of steps to hone the company’s strategy and position Pandora to continue to build audience and extend monetization through a combination of advertising and subscription revenue streams. In addition to exceeding our revenue expectations this quarter, we also announced several important strategic moves including a $480 million investment from Sirius XM, the sale of Ticketfly, and changes to our board and management team," said Naveen Chopra, CFO and interim CEO of Pandora. "We remain laser-focused on execution that attracts listeners and investments that drive the growth and monetization of our audience."
Spotify has confirmed that it has surpassed 60 million subscribers. That's up from 40 million paid in March of this year; and means that the worlds top music streamer is adding an impressive 2 million paid users per month. As of June, Spotify's active users - both paid and free ad-supported - totalled 140 million.
This jump in subscriptions comes as Spotify is preparing to enter the public stock market; and at a time when new deals with the major labels incentivize the streamer to shift more users from free to paid. Today's stats offers good news towards both goals.
For most DIY artists, promoting over Facebook has become a huge hassle and can often seem more trouble than it's worth organic reach now often next to impossible. In this article we look at the potential of Facebook live, and how it can be used to effectively reach fans.
What’s the surest way to reach your fans on Facebook? Live video.
Years back there was a good chance your followers would actually see your posts in their Facebook feeds. Not so anymore. Now you post something, watch how it performs, and then consider paying to promote that content to followers who didn’t see it “organically,” which is still worth doing for your most important posts because Facebook remains, despite challenges from newer apps, the most powerful social media platform.
The past is the past. The present is Live.
To many DIY artists Facebook has seemed over the past six or seven years like some cruel stepmother taking away all our toys. Granted, these never were OUR toys to begin with; Facebook was just letting us borrow them. But we had them long enough to forget they weren’t ours.
Yes, Facebook reduced our reach, reduced it some more, and frowned on posts with external links (especially YouTube links) — but that’s in the past. Today, in Facebook’s frenzy to become even more of a native-content giant, there is an opportunity for musicians.
Facebook loves when you upload video directly to their platform. (I mean, they’re launching a standalone app for video creators!) But even better, they love when you “go Live” and stream video real-time to your followers on Facebook.
This too could change one day but RIGHT NOW the best bet for reaching your fans without paying is to use Facebook Live (on your smartphone or desktop webcam).
Ten ideas for musicians on Facebook Live
What events can musicians live stream to their Facebook followers? Our friend Dave Ruch wrote an article about Facebook Live you should check out. In it he offers a few suggestions:
Do a live Q&A from your living room
Tell an interesting story about some of your material
Film some “behind the scenes” stuff on your way to a gig, or before you perform
Broadcast a live gig
Even if you have a text-based post, make a video about it and include the text in the body of the post
To Dave’s ideas, I’ll add:
Do a needle drop (and premiere your new tracks — or at least tease them — via Facebook Live)
Use Live to keep fans informed about the progress of a video shoot, crowdfunding campaign, etc.
Solicit feedback, or test new material in front of your live online audience
Horse around (seriously, these videos of bands just clowning are some of my favorites)
Create a series that’s related to your music (cover song Tuesdays) or one that’s unrelated to your music (the best tacos on tour)
How do you use Facebook Live? I’d love to hear in the comments.
For a detailed guide to using Facebook Live, go HERE.
And go HERE to read how one band used Facebook Live (and a lot of preparation) to turn their concert into an exciting online event.
Chris Robleyis the Editor of CD Baby's DIY Musician Blog. I write Beatlesque indie-pop songs that've been praised by No Depression, KCRW, The LA Times, & others. My poems have appeared in Poetry Magazine, Prairie Schooner, The Poetry Review, & more. I live in Maine and like peanut butter chocolate chip cookies, a little too much.
There is no question that streaming is driving a new era in the music industry. But where is streaming now and where does it fits in the longer term evolution of the music market? MIDiA analyst Mark Mulligan looks for answers.
Streaming has driven such a revenue renaissance within the major record labels that the financial markets are now falling over themselves to work out where they can invest in the market, and indeed whether they should. For large financial institutions, there are not many companies that are big enough to be worth investing in. Vivendi is pretty much it. Some have positions in Sony, but as the music division is a smaller part of Sony’s overall business than it is for Vivendi, a position in Sony is only an indirect position in the music business.
The other bet of course is Spotify. With demand exceeding supply these look like good times to be on the sell side of music stocks, though it is worth noting that some hedge funds are also exploring betting against both Vivendi and Spotify. Nonetheless, the likely outcome is that there will be a flurry of activity around big music company stocks, with streaming as the fuel in the engine. With this in mind it is worth contextualizing where streaming is right now and where it fits within the longer term evolution of the market.
The evolution of paid streaming can be segmented into three key phases:
Market Entry: This is when streaming was getting going and desktop is still a big part of the streaming experience. Only a small minority of users paid and those that did were tech savvy, music aficionados. As such they skewed young-ish male and very much towards music super fans. These were people who liked to dive deep into music discovery, investing time and effort to search out cool new music, and whose tastes typically skewed towards indie artists. It meant that both indie artists and back catalogue over indexed in the early days of streaming. Because so many of these early adopters had previously been high spending music buyers, streaming revenue growth being smaller than the decline of legacy formats emerged as the dominant trend. $40 a month consumers were becoming $9.99 a month consumers.
Surge: This is the ongoing and present phase. This is the inflection point on the s-curve, where more numerous early followers adopt. The rapid revenue and subscriber growth will continue for the remainder of 2017 and much of 2018. The demographics are shifting, with gender distribution roughly even, but there is a very strong focus on 25-35 year olds who value paid streaming for the ability to listen to music on their phone whenever and wherever they are. Curation and playlists have become more important in order to help serve the needs of these more mainstream users—still strong music fans— but not quite the train spotter obsessives that drive phase one. A growing number of these users are increasing their monthly spend up to $9.99, helping ensure streaming drives market level growth.
Maturation: As with all technology trends, the phases overlap. We are already part way into phase three: the maturing of the market. With saturation among the 25-35 year-old music super fans on the horizon in many western markets, the next wave of adoption will be driven by widening out the base either side of the 25-35 year-old heartland. This means converting the fast growing adoption among Gen Z with new products such as unbundled playlists. At the other end of the age equation, it means converting older consumers— audiences for whom listening to music on the go on smartphones is only part (or even none) of their music listening behaviour. Car technologies such as interactive dashboards and home technologies such as Amazon’s echo will be key to unlocking these consumers. Lean back experiences will become even more important than they are now with voice and AI (personalizing with context of time, place and personal habits) becoming key.
"Simplicity of product offering got us to where we are, but a more sophisticated approach is needed for the next era of paid streaming."
It has been a great 18 months for streaming and strong growth lies ahead in the near term that will require little more effort than ‘more of the same’. But beyond that, for western markets, new, more nuanced approaches will be required. In some markets such as Sweden, where more than 90% of the paid opportunity has already been tapped, we need this phase three approach right now. Alongside all this, many emerging markets are only just edging towards phase 2. What is crucial for rights holders and streaming services alike is not to slacken on the necessary western market innovation if growth from emerging markets starts delivering major scale. Simplicity of product offering got us to where we are but a more sophisticated approach is needed for the next era of paid streaming.
