Pandora Q2: Revenue Up, Listener Hours, Active Users Down

Pandora reported a 12% year over year revenue increase in Q2 2018, after the markets closed on Tuesday. But both monthly listener hours and active users continued a slow but significant downward spiral.

Total listener hours on Pandora were 5.09 billion for the second quarter of 2018, down from 5.22 billion at the end of Q1 2018. Active users were 71.4 million at the end of the second quarter, compared to 72.3 million just three months ago.

 

Pandora Plus and Pandora Premium subscribers were approximately 6 million at the end of the second quarter of 2018, up from 5.63 million at the end of Q1.   

“We made continued progress against our strategy with total revenue growing 12%, subscription revenue up 67% and ad hour trends improving for the third straight quarter,” said Pandora CEO Roger Lynch. “New partnerships with top brands like Snap and AT&T, as well as enhancements to our ad tech and programmatic offerings, position us to further accelerate growth and ownership of the expanding digital audio marketplace.”

KEY PANDORA Q2 2018 FINANCIALS

• Total Q2 Revenue was $384.8 million, growing 12% year-over-year excluding Australia, New Zealand & Ticketfly, exceeding top-end of guidance
• Q2 Subscription revenue was $113.7 million, growing 67% year-over-year excluding Australia, New Zealand & Ticketfly
• Ad hour trends improved for the third straight quarter
• Ad RPM hit an all-time Q2 high of $68.75, growing 4% year-over-year
• Added 351 thousand to approximately 6 million subscribers; which grew 23% year-over-year
• Announced partnerships with AT&T, Snap and Cheddar
• Completed the acquisition of AdsWizz and launched Audio Programmatic

Non-GAAP net loss was $38.9 million, or $0.15 per share. This compared to $50.1 million net loss or $0.21 in the year ago quarter. Adjusted EBITDA was a loss of $34.6 million, compared to a loss of $54.3 million in the same quarter last year.

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Buying, Selling Music Merch: The Basics

Revenue from merch can be a fantastic way to supplement your income as a performing musician, with the additional bonus of providing free advertising. Here we look at the basics of getting into the merch game, from design to sale.

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Guest post by Matt Holland of Gigsalad

As a performer, you’re always seeking out new ways to gain more potential clients. Buying and selling merch is a great way to advertise while providing you additional income. If you’ve never considered creating your own merchandise or always thought it would be too complicated, it’s time to reconsider! Here are the basics to buying and selling merch.

Design it.

Before you start buying and selling your own merchandise, first consider your brand and design. If you create a brandand design that people will love, you’ll naturally attract more buyers. A well-designed product receives more attention and will guarantee more buyers.

Consider a company that you love. Think about what the company communicates with their logos, colors, and design choices. How can you do the same thing with your own design? If it is within your budget, find a professional designer for your merch and branding. The product will be reusable for advertising, you’ll have something you’re proud of, and it will result in more purchases and hopefully, fans and clients.

Buy it.

There are a number of options available when it comes to buying your merch. Shirts, buttons, stickers, mugs, and more are available to display your brand. Feel free to get creative! After you decide what type of merch you want to sell, find a supplier.

For music distribution and CDs, our friends at CD Baby are the best in the business! With CD Baby, you can not only set up digital merch and get your music on streaming services but also order physical CDs that look great. Want that classic analog sound? Get your music on Vinyl with Disc Makers.

For clothing, the options are nearly endless. The supplier you choose should depend on the type of clothing you wish to purchase. However, the main thing to keep in mind is quality. Create a comfortable shirt and people will want to wear it. This seems simple, but it can easily be overlooked when you want to save a few dollars. For shirts, we recommend 5 Cents T-Shirt Design but you can also find a large number of attire possibilities on Merchly. Keep in mind that you often receive deals for ordering in bulk, so be prepared to make a large order to increase your return.

Miscellaneous merch like stickers, coffee mugs, and buttons can be a unique way to attract those fans who would not otherwise purchase your merch. Smaller, cheaper items are good to have in stock for giving out at events. A creative sticker or button will attract attention and can help you be memorable after the gig is over.

Sell it.

After you decide on your various merch it’s time to get it to your fans. Sell your merch in as many places as possible — online, through social media, and at appropriate live events. Do what you can to get your branded merch in front of as many people as possible. Here are a few ways to get your merch into people’s hands.

Create an online store. The first place you should be selling your merch is online. This is by far the easiest way to sell your merch and the most effective. By creating a website with Bandzoogle, you will have an easy-to-manage built-in online store where you can sell digital and physical merch.

Bring your merch with you to your gigs. When appropriate, set up a small table at the event to display your products. Most of the time, it will only be appropriate to sell your merch at public events. However, the occasional private event, like a House Concert, may also be acceptable. Of course, consider the mood and environment prior to selling anything and always get approval from your client beforehand.

Push your merch on social media. Plan a giveaway or competition that can get people interested. Everyone loves getting free items and when they do, those items become a conversation piece and more advertising for you. Additionally, hosting a giveaway is a great way to interact with your fans and increase your web presence via social media.

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Spotify Isn't Priced At $10 Everywhere, And That's Just Fine [Glenn Peoples]

When the fairness of payments to artists and labels is debated, it's important to factor in that monthly subscription prices for Spotify and other music streaming services varies from territory to territory; and that's just fine, writes Glenn Peoples.

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Spotify cards at a 7–11 market in Mexico City, mid-July 2018.

Each month costs 100 pesos, or about $5 U.S.

By journalist and analyst Glenn Peoples from Medium

While in Mexico City recently I ran across Spotify pre-paid cards in a 7–11 market. The cards provide Spotify premium access for varying periods at 100 pesos per month, or about $5 US—half of the standard $9.99 rate in the United States. And it got me thinking about market potential created by localized pricing.

My article on localized pricing can be seen at Music Business Worldwide.

Spotify can only charge what the market will bear. Same goes for Apple Music. Because of this, the streaming services will set rates according to consumers’ income in a particular country. In Mexico both Apple Music and Spotify charge $99 pesos, or about US $5, for the standard subscription. They’re about the same in Indonesia at 49,000 ($3.45) for Apple Music versus 49,900 ($3.39) for Spotify. Both companies charge 16.99 reais, or $4.50, per month in Brazil.

So these countries have relatively low prices, but they also have good revenue potential because of their populations (each larger than any European country): 267 million in Indonesia, 211 million in Brazil, and 131 million in Mexico.

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Pitchfork Launches Dedicated Hip Hop Vertical

Pitchfork today debuted a new section dedicated to of hip-hop. “Levels," the first new section to launch on Pitchfork since “The Pitch” debuted in 2013, hopes to be "the essential destination for hip-hop obsessives."

Levels is led by senior editor Timothy "Timmhotep" Cornwall. Previously, he led NPR Music's hip-hop and R&B coverage and wrote for music titles including MTV, Rolling Stone, Complex, VIBE, and XXL. His team includes staff writer Alphonse Pierre, contributors Stephen Kearse, Briana Younger, and contributing editor Sheldon Pearce.

“With Levels, we’re aiming to add layers of depth to today’s hip-hop coverage,” said Cornwall. “We’re seeking to go beyond sensational headlines and hot takes to humanize our subjects and bring much-needed context to the conversation about this artform we love so much and the people who create it."

Forgoing the short, breaking news blog formula, Levels is designed to examine broad themes that exist across the genre and their intersections with society at large. This approach will allow writers to focus on the people, communities, objects, subcultures, and subgenres within the music and culture. Some early themes - which will sound  familiar to readers of current hip hop outlets - include money, sex and humor.

Debut content also explores the theme of family, and includes a look at the cultural impact of the Odd Future collective 10 years after their first mixtape, a conversation with feminist rapper and mom Bbymutha, and a look at classic rap songs about family. 

Levels will publish daily and include longform investigative journalism, provocative think pieces, and artist profiles. It will also publish “The Ones,” a new daily playlist identifying essential hip-hop songs, which is available now on Pitchfork’s Spotify account. Levels will also be rolling out a hip-hop podcast, newsletter, and video series in the coming weeks.

"As Pitchfork's rap coverage has grown, we’ve found an audience eager to make more meaningful connections with it,” said Pitchfork founder Ryan Schreiber. “Hip-hop has become a globally pervasive force, extending far beyond its musical roots, so expanding our editorial purview to reflect this is essential.”

 

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Harry Fox Agency Unfairly Blamed As MMA Debate Rages [Chris Castle]

In this piece Chris Castle defends the Harry Fox Agency which has, of late, been heavily maligned as debates over the Music Modernization Act Continue to rage on. Here he looks at the facts and explores alternative solutions to simply ganging up on the HFA.

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Guest post by Chris Castle of Music Tech Solutions

When you’ve been around as long as the Harry Fox Agency, you’re going to make some enemies, screw some things up, over react and over reach.  You’re also going to do a lot of things right, make some friends and do some good.  But most of all, you’re going to be the whipping boy for your client’s enemies, screwups, overreacting and over reaching.

From one whipping boy to another, that’s just not fair and anyone who has ever tried to do anything really hard with data in the music business knows it.  So pish and pshaw on those who gang up on HFA in the debate on the Music Modernization Act.  Let’s look at the facts.

When HFA developed the first digital download mechanical license in the late 1990s, the current crop of critics were nowhere to be seen.  Was it a perfect solution?  Not entirely, no.  But it did work and business got done and songwriters made money.  We were all feeling our way along the digital precipice and making it up as we went along.

I will go out on a limb here and say that if it weren’t for people like HFA’s Ed Murphy, it’s entirely possible that there would be no “streaming mechanical” at all.  That would be the same Ed Murphy who stepped up and licensed Napster’s effort at a p2p subscription service in 2001.  Again, the current crop of critics were nowhere to be seen.

Here’s another fact that you won’t hear about.  When it came time to mete out justice to a massive infringer record company who had been ripping off Texas singer-songwriters for years and years, it was HFA who stood with us.  Not because they made money, not because there was some pot of gold for them–there wasn’t and they didn’t.

They did it because it was the right thing to do.

They may not be choir boys, but they have their moments.  When we really needed them, they showed up for Texas songwriters.  And that’s how we measure friendship in my part of the world.

HFA is often blamed for the Spotify meltdown which in its own way led directly to the controversial safe harbor in the Music Modernization Act.  You can tell that’s true because the MMA’s proponents never talk about the safe harbor except to say that they negotiated away the rights of all the world’s songwriters in some “grand bargain,” the grandness of which elludes me almost as much as the legitimacy of consent.

The fact that Spotify chose to go forward without all the rights necessary to do business is not HFA’s fault.  It is Spotify’s fault.  If Spotify has an issue with HFA, that’s between them.  Ultimately, Spotify knew what it was doing and I seriously, seriously doubt that HFA told them otherwise.  I won’t believe it without both pictures and tapes.

Another fact is that the clearance problems that Spotify and some other HFA clients have were set in motion well before SESAC’s acquisition of HFA in 2015.   If anything, HFA’s been doing it better and cleaner after the acquisition in my opinion.  So if there is blame to go around, then the blame should go all the way around.

You may hear some pretty nasty comments about HFA now that its parent’s parent company is lobbying for a seat at the table on the Music Modernization Act.  Pay them no mind.  If SESAC and HFA had been dealt in at the beginning of the MMA process–which it sounds like they were not along with a lot of other people who should have been there, too–then there’d be some actual evidence that they were reneging on a commitment instead of no evidence that a commitment was ever made.  If you’re going to bet the farm, don’t take silence as consent.

Bashing HFA won’t fix the failure to include them, and I for one think it’s really unfair.  The solution isn’t dealing them out, the solution is embracing SESAC and HFA by respecting their efforts to make MMA a better bill that will have a greater chance of flourishing.

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