Selling against Pandora in 2014

19
Evolution of the Audio Consumer & Advertiser

description

For those radio sellers that are interested in understanding how to sell against Pandora Radio.

Transcript of Selling against Pandora in 2014

Page 1: Selling against Pandora in 2014

Evolution of the Audio Consumer & Advertiser

Page 2: Selling against Pandora in 2014

• Advances in tech expands listeners options

• Expansion of bandwidth and wireless services

• Advances in smartphone tech mobilize the internet

• As consumer options grow, advertiser’s options grow

• Seamless in dash experience

Page 3: Selling against Pandora in 2014

US Monthly Internet Radio Listeners, 2010-2016

93.1

112.9

132.6147.3

159.6169.3

176.5

2010 2011 2012 2013 2014 2015 2016

30.00%

36.10%

41.90%46.10%

49.50%52.00% 53.70%

% of population

Source: eMarketer, March 2012,confirmed and republished Aug 2012

Page 4: Selling against Pandora in 2014

Up 45%

AM/FM Local Stations’ streaming

PurePlaywebcasters like

Pandora

Up 18%

Source: Proxi Digital Audio Landscape: The Major StreamersTriton monthly Webcast Metrics Top 20. AAS, M-F 6A-8P Domestic . % change August 2012 vs. August 2013

Internet Audio Usage is Growing

•109 million users

•AM/FM live radio streams

•Delivering Local

Curated Programming

Page 5: Selling against Pandora in 2014

AM/FM Publishers Continue Impressive Growth VS. Pure Play

AM/FM Streams Pure Play0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%7.11%

0.59%

January 2014 Average Active Sessions (AAS) Monday-Sunday 6a-Mid

Page 6: Selling against Pandora in 2014

P’s ad based strategy has been successful

• P has hired great radio sales people

• With strong radio client relationships

“We are targeting radio ad dollars”

-Joe Kennedy

Page 7: Selling against Pandora in 2014

P’s ad based strategy has been successful

• Converted AAS to AQH• Backend ease of

purchase

“We can offer SMB’s a better return on investment in

terms of foot traffic & brand awareness.”

- John Trimble

Page 8: Selling against Pandora in 2014

What Your Buyers Are Saying About “P”?

“Pandora provides demographic and geographic targeting”

“Easier to buy with a conversion of AAS to AQH”

“Affordable and trackable”

“Pandora is the #1 station in the Market”

“Good click through rates”

Page 9: Selling against Pandora in 2014

Pandora’s Progression

$283.00

$423.40

$598.60

$801.30

Pandora Revenues

2012 2013 2014 2015 Web Ads Ad Insertion Subscriptions$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

Product Breakdown

2012 2013 2014 2015

Source: J.P. Morgan based on company reports

Page 10: Selling against Pandora in 2014

Pandora’s Net Loss by Year

-45

-40

-35

-30

-25

-20

-15

-10

-5

0 2010 2011 2012 2013

- $1.8M

- $1.6M

- $26.7M

- $40M

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Pandora’s Market Valuation

0

1

2

3

4

5

6

7

82011 2012 2013

$2B $1.75B

$7.09B

Page 12: Selling against Pandora in 2014

SWOT Analysis of PandoraStrengths

AccessibilityFreeLimited Interruptions vs terrestrialFirst to market in pure play spaceStrong sales forceMore format varietyMore variety inside each format

Opportunities

Lower royalty fees and expensive175M registered users75M monthly active usersImproving registration accuracy Ask mobile users for location

Weaknesses

RegistrationPromptingIP address trackingIncreased interruptionsLimited growthInaccurate self serving metricsLimited playlistUnsustainable business modelIncreased competitionLimited skipping ability

Threats

Terrestrial radio push backIncreased competition in pure playInaccurate data on usersElevated commercial loadExpensive overhead – as they grow so do their expenses disproportionally

Page 13: Selling against Pandora in 2014

Registration

• Privacy Concerns = Flawed Reg. Data

• Almost 9 in 10 users provide false or incomplete information

• This creates issues with demo, gender, zip code, and qualitative accuracy

• Reliability

Source: Blue Ink 88% of people who registered on the internet provide false or incomplete information citing privacy issues.

Page 14: Selling against Pandora in 2014

Are You Still Listening?

• Prompting occurs 1x an hour on desktop (20% of users)

• Prompting rarely occurs/never occurs on a mobile device

• Inaccurate hours spent

• Gross impressions delivery

Page 15: Selling against Pandora in 2014

Where are you?• Desktop IP addresses can be INACCURATE

• Reliability of registration process IS INACCURATE

• Users rarely change cell phone #’s or area codes when they move

• Cell data is inaccurate AT&T = NORTHERN CALIFORNIASPRINT = KANSAS CITYVERIZON = SOUTHERN CALIFORNIA

• Cell number portability has made area code irrelevant

Page 16: Selling against Pandora in 2014

P’s Users Frustration Grows

Not enough music discovery

Miss hearing people

Gets boring

Too predictable

Too many bad songs

No local information

Can't skip enough songs

Commercials are annoying

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

201420132012

Jacobs Tech Survey 10

Page 17: Selling against Pandora in 2014

Monthly Active Users by Quarter

2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q10

10

20

30

40

50

60

70

80

49 53 5663 67 70 71 73 73

Page 18: Selling against Pandora in 2014

Pandora Financials

2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4 2013 Q1

Q2 Q3 Q40

50

100

150

200

250

RevenueExpenses

Page 19: Selling against Pandora in 2014

Investors Beware

• Unsustainable business model• Overall registered users are down• Monthly user base has flattened• Listener experience has worsened• Limited playlist• More competitors• Royalties increasing• User mobile data issues