pandora

Late yesterday afternoon Pandora reported on its finances and audience levels for the first quarter of its 2014 fiscal year (which ended April 30).

The leading webcaster's total revenue for the period of $125.5 million represents 55% growth since a year ago ($105 million came from ads, $20 million from subscriptions). Total listener hours grew 35% to 4.18 billion for the first quarter of fiscal 2014, compared to 3.09 billion for the first quarter of fiscal 2013.

Despite record revenues and audience, the company ended up losing nearly $29 million during the quarter.

"Content acquistion costs" (i.e. royalties for licensing music) grew 48% from $56 million a year ago to $83 million in this period. This means these costs amounted to 66% of Pandora's revenue that quarter.

Total mobile revenue was nearly $84 million -- nearly double year-over-year -- and outpacing growth of its mobile audience (which grew 47%).

Pandora added more than 700-thousand new subscribers to its ad-free Pandora One service in the first quarter, up 114% to more than two-and-a-half million (and more net new subscribers in the quarter than in all of fiscal 2013, which means Pandora has the largest U.S. streaming subscription audience of any music service).

Pandora says it now regularly reaches 70.1 million active users (up 35% from a year ago), and accounted (in April) for 7.33% of total U.S. radio listening.

Pandora last week announced media planning and buying integration with the largest media buying software platforms Mediaocean and STRATA.

"This marks the launch of the final stage of Pandora's plans to fully integrate Pandora into media buying platforms," the company's press release reads. May of last year saw the launch of Triton Digital's measurement of Pandora in traditional radio metrics such as AQH and Cume. In March (see RAIN here) Pandora announced that it would make its audience data available in STRATA and Mediaocean's Donovan and Mediabank stewardship systems, enabling radio ad buyers to compare Pandora national and local audience data directly to U.S. radio broadcasters' numbers.

This "final stage," says Pandora, makes it "the first and only digital publisher to integrate the planning, buying and billing phases of the buying process of digital advertising." The new solution "automates the transactional process between media buyers and digital publishers."

"We knew that a substantial portion of the $15 billion radio market is bought through automated systems," Pandora VP of audio sales Doug Sterne told news source AdExchanger. "About 70% of all spot radio is transacted through those systems. So we're trying to duplicate the workflow associated with buying radio. Using Mediaocean and STRATA will allow us to directly tap that pipeline of spending."

Read more in AdExchanger here.

Leading webcaster Pandora has reportedly been giving artists a preview of new data tools so they can learn more about who's listening to their music.

Those tools include a "heat map" that shows where their songs are most widely played, and charts comparing demographics of an artist's listeners to Pandora's overall audience.

Billboard reports, "The tool is essentially a dashboard that tells artists such things as the spin counts of each of their songs, how many thumbs up (or down) their songs have received and their audience reach by age, gender and geography, among other things."

Various independent artists have seen the dashboard in recent weeks. New York singer-songwriter Ben Arthur, who got to preview the tool, told Billboard, "They showed me which of my songs were getting lots of thumbs up, and they were not the songs I would have guessed. I can imagine a time when I would upload tracks before they’re released to test which songs would be more popular, which songs to make videos for and which songs would get a label’s attention."

Read more in Billboard here.

Pandora plans to work with artists through an expansion into branded content and offline experiential marketing. Last week the Pandora announced it had brought on former record label exec and Billboard publisher Tommy Page as VP/Artist and Brand Partnerships, to "expand artist development programming through both branded content."

Page said, "My goal here is to help develop and grow those artists' careers and partnerships using personalized concert series and events."

As expected, Google formally announced its new online music subscription service, Google Play Music All Access today at its Google I/O developer conference.

The company is touting the service as "radio without rules," according to The Verge. It reports the All Access service "allows users to create radio stations from particular artists — providing comparable functionality without any of the limitations," but went into no further detail. One might assume the "functionality" is "comparable" to Pandora and other such services, but "without any of the limitations" of the statutory webcast license, which prohibits on-demand song plays, going backwards in a stream to re-hear a song, etc. (We delved a little further into these matters yesterday here.) 

By and large, it's music subscription of the Spotify/Rdio sort: $9.99/month unlimited on-demand access and playlist features, for computers and Android devices. Listeners can access both "local" music (which they have stored on their computer or handheld) as well as Google's streaming-available collection, as a single "master library." The service includes a "recommendation engine" to help listeners discover new music based on their preferences. Google is offering a 30-day free trial, and if you sign up by the end of June, it's just $7.99/month.

Read more from The Verge here.

Webcaster and on-demand subscription service Slacker last week revealed it's reaping the fruits of its February relaunch in the form of surging audience growth. The company also claims it's attracting Pandora users shut out by that company's recent 40-hour/month listening cap on free mobile streams.

What's more, CEO Jim Cady says his company is "gross margin profitable" on every listener in part because "direct" royalty deals have made it less expensive for Slacker to license music than for its competitors.

In a press release, Slacker says since its February relaunch (including a redesign of its web site and mobile apps), more than six million new listeners have registered, including over 100-thousand paid subscribers. And the amount of time the average user listens has jumped 25%. Among new listeners, 3.5 million listen via mobile devices. Its user penetration on Apple devices has more than tripled.

Slacker partners for content with ABC Radio. Its general manager Steve Jones told USA Today, "Our audience has grown 3% to 4% every week since February. We're thrilled."

And they're ready to bring on even more users. According to paidContent, Slacker is close to sealing a deal with "a major telco provider" -- a move Cady predicts could be worth "millions of paid subscribers" to his service. Last week we covered news (here) that Slacker had entered a partnership with Vodaphone which would enable them to enter the UK market, but it's not clear if this is the deal of which paidContent wrote.

Early in March, leading webcaster Pandora announced, as an effort to reduce music royalties, it would limit mobile listeners to 40 hours per month of free, ad-supported listening (paid listening by subscribers is not limited, nor is listening on Pandora.com). While services make significantly less on advertising to mobile listeners, music licensing costs remain the same -- meaning heavy users of free ad-supported mobile streams are hardest to monetize for webcasters.

Cady says his service has gained listening partly due to Pandora's move. Adding to that, he tells numerous sources (like VentureBeat), Slacker's "proven business model" enables Slacker (unlike Pandora) "to monetize users with free accounts" -- even mobile users.

First, Slacker simply runs more ads than Pandora. Wedbush Securities analyst Michael Pachter explained this to USA Today: "Slacker is one-sixth the size of Pandora, and both run ads. Slacker does three minutes per hour, Pandora one per hour. It's that simple."

But perhaps even more interesting is that Cady (pictured) says his "direct deals" with record labels and publishers save the company big money. Slacker told Evolver.fm it doesn't pay SoundExchange -- the music industry body that collects and distributes royalties for those services that operate under statutory licenses. Slacker claims their direct deals enable them to pay a lower royalty than do SoundExchange customers (like Pandora).

Slacker, which launched its digital music service in 2010, has raised $50 million in investment. The company also recently expanded its operations, opening offices in Palo Alto, CA and New York.

Read more in coverage from paidContent here, USA Today here, VentureBeat here, and Evolver.fm here.

The Financial Times reports that Apple's development of its "iRadio" streaming service are caught up by rights negotiations yet again, this time with Sony Music.

Apple reportedly has reached and agreement with Universal Music, and is close to a deal with Warner Music, leaving only Sony among the "big three" label groups.

Though Apple won't verify any details, or that they're even developing such a product, the Financial Times reports:

"These people said that Apple had first offered a royalty of about 6 cents for every 100 tracks it streams, but had raised this to about 12.5 cents, in line with the rate paid by internet-radio service Pandora. But it was unclear whether Universal had accepted the 12.5 cent rate, and other labels are thought to be pushing for better terms."

The paper's sources also suggest Apple has offered to pay for music rights on a per-track royalty, an ad revenue share, and a guaranteed minimum. Read the Financial Times' coverage here.