With over 4 million paying customers and revenue predicted to reach $880 million in 2012, what chance does Pandora have in keeping the wolves from the door now that Spotify has its feet firmly under the table in the US?
A little over a year ago, Spotify strode into the US music streaming arena and threatened to take on the best we had to offer including Grooveshark and of course, Pandora. But can this European behemoth really take on the best of the US?
It has recently been announced that the Swedish giant has already doubled its number of paying customers from 2million to 4million in the year since it was launched in the US and the site now boasts an impressive25% conversion rate. If you’re in the market for a digital media job, Spotify is a company to keep an eye on.
Born in Europe, Taking Over the World
Spotify offers users a catalog of around 15million digitally restricted songs from quality purveyors including EMI, Universal and Warner, and boasted 10million users just two years after launch in 2008. Two-and-a-half million of those users were fully paid-up members.
Since its 2011 appearance on the US scene, Spotify has extended its services to take in Germany, New Zealand and Australia and recently launched an innovative partnership with Coca Cola that will see Spotify’s technology underpin all of Coca Cola’s music services globally; a partnership that Coke has described as offering ‘limitless’ opportunities.
As well as actively expanding its business, Spotify is also keeping its eye firmly on competitors by developing and improving its technology. The Spotify Play Button will allow bloggers and webmasters to offer any song or playlist to all of their visitors completely free – it’s even integrated into the Tumblr dashboard, while the all-new Android app is now available via Google Play.
Where Does Pandora Sit?
With just 800,000 tracks at its users disposal, Pandora put a lot of faith in its Music Genome Project – a neat bit of software that generates playlists or ‘stations’ for users based on their initial music choices. It’s a cute bit of kit, but it does mean users can’t listen to what they want, when they want and this could let the service down. The company also has its eye firmly on the US market, rather than world domination.
Pandora’s June audience metrics make for interesting reading though. Listener hours were up 77% from 640million to 1.08billion in June 2012 from the same period in 2011, and active listeners were up 51% and stood at 54.5million at the end of June. The company has also recently announced a program that will allow local media firms to sell Pandora products with their own offer in a bid to help smaller ad companies reach consumers on-the-go.
Some of the companies already signed up to the service include The Tacoma News Tribune, The Miami Herald and The Salt Lake The Tacoma News Tribune – all of which are McClatchy companies, and the publisher believes that partnering with Pandora will allow them to open up new revenue streams and develop the digital arm of their own businesses.
It certainly seems as if the music streaming services are continuing to enjoy success regardless of their business model and will continue to do so by responding and adapting readily to shifts in the market and consumer demands.