Pandora lost $407m in the first half of 2017 – and continues to shed listeners

Pandora‘s active listener base fell to its lowest point in over three years in the quarter to end of June – as the company’s net losses in the first six months of 2017 clocked up to an eye-watering $407.4m.

According to company filings, Pandora’s monthly active user audience stood at 76m in Q2.

That was down 2.1m listeners on the same quarter in 2016, and down 3.4m on the same quarter in 2015.

In fact, you’d have to go back to the first quarter of 2014 (75.3m) to find a quarter where Pandora had fewer active listeners.

The streaming company recently made major changes to its make-up – taking on an 11th-hour $480m financing from SiriusXM in exchange for an effective 16% stake, in addition to selling off ticketing arm Ticketfly for $200m and parting company with CEO Tim Westergren and other top execs.

Pandora’s Q2 results highlight exactly the size of the challenge facing its new investors and senior management team.

The company posted a $267.5m operating loss in the quarter, widening 272% year-on-year.

Its quarterly net loss was even more severe at $275.14m, a 261% hike on the $76.3m net loss recorded in the equivalent quarter of 2016.

Pandora’s $407m net loss in the first six months of this year is bigger than its $343m net loss in the entire 12 months of 2016.

However, Q2’s figure does include a one-time goodwill impairment write down of $132m related to the net assets of Ticketfly and other one-time expenses related to its recent financing.

Pandora also had to shell out $23.5m on ‘contract termination fees’ – a euphemism for the money it contractually had to bung would-be investor KKR when it reversed out of their deal and decided to take Sirius‘s money instead.

There was better news in terms of Pandora’s consolidated revenue in Q2, which grew 10% year-on-year to $376.8m in the three months.

Within that figure, advertising revenue bounced 5% year-on-year to $278.2m.

There was also positive growth in paying subscribers – which increased 24% year-on-year to 4.86m from 3.93m in Q2 2016.

Subscription (and other) revenue followed suit, up 25% year-on-year to $68.9m.

However, there’s a catch: just 390,000 of these subscribers were signed up to Pandora’s $9.99-per-month Premium tier, which publicly launched in March.

The rest of them were using to its mid-price, limited-interactive $4.99-per-month offering.

Now-ex Pandora CEO Tim Westergren predicted in February that the streaming company would finish 2017 with between 6m and 9m paying subscribers.

Time will tell.

Music Business Worldwide

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