Pandora 2016 Annual Report Download - page 13

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PART I
Table of Contents
2
ITEM 1. BUSINESS
Overview
Pandora
Pandora is the world’s most powerful music discovery platform, offering a personalized experience for each of our
listeners wherever and whenever they want to listen to music -€whether through earbuds, car speakers or live on stage. Our
vision is to be the definitive source of music discovery and enjoyment for billions. The majority of our listener hours occur on
mobile devices, with the majority of our revenue generated from advertising on these devices. We offer both local and national
advertisers the opportunity to deliver targeted messages to our listeners using a combination of audio, display and video
advertisements.€Founded by musicians, Pandora also empowers artists with valuable data and tools to help grow their careers
and connect with their fans.
For the twelve months ended December 31, 2015, we streamed 21.11 billion hours of internet radio, and as of
December€31, 2015, we had 81.1 million active users during the prior 30-day period. Since we launched our non-subscription,
ad-supported radio service in 2005 our listeners have created over 9 billion stations.
Ticketfly
Pandora completed the acquisition of Ticketfly on October 31, 2015. Ticketfly is a leading live events technology
company that provides ticketing and marketing software and services for venues and event promoters across North America.
Ticketfly's ticketing, digital marketing and analytics software helps promoters book talent, sell tickets and drive in-venue
revenue, while Ticketfly's consumer tools help fans find and purchase tickets to events. For the twelve months ended December
31, 2015, Ticketfly sold approximately 12.5 million tickets, excluding box office sales, to 4.4 million unique ticket buyers to
approximately 90,000 live events, with more than $490 million in gross transaction value, excluding box office sales.
Our Service
Pandora
Unlike traditional radio stations that broadcast the same content at the same time to all of their listeners, we enable each
of our listeners to create personalized stations. The Music Genome Project and our content programming algorithms power our
ability to predict listener music preferences, play music content suited to the tastes of each individual listener and introduce
listeners to music we think they will love. When a listener enters a single song, artist, comedian or genre to start a station—a
process we call seeding—the Pandora service instantly generates a station that plays music we think that listener will enjoy.
Based on listener reactions to the songs we pick, we further tailor the station to match the listener's preferences. Listeners also
have the ability to add variety to and rename stations, which further allows for the personalization of our service.
We currently provide the Pandora service through two models:
• Free Service. Our free service is advertising-supported and allows listeners access to our music and comedy
catalogs and personalized playlist generating system for free across all of the Pandora delivery platforms.
€
• Pandora One. Pandora One is a paid subscription service without any advertising. Pandora One also enables
listeners to have more daily skips, enjoy higher quality audio on supported devices and enjoy longer timeout-free
listening. In addition to our traditional monthly subscriptions, service listeners can now purchase a single day
Pandora One experience with our “Pandora One Day Pass” product.
Beyond song delivery, listeners can discover more about the music they hear by reading the history of their favorite
artists, viewing artist photos and buying albums and songs from Amazon or iTunes. Our service also incorporates community
social networking features. Our music feed feature enables a real-time, centralized stream for listeners to view the music that
their social connections are experiencing and to provide and receive recommendations for songs, albums and artists. Listeners
can also share their stations across other social media outlets and through email by using our share feature or by distributing our
individualized station URLs.
Ticketfly