Pandora 2016 Annual Report Download - page 7
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We are building off of an incredibly strong core business, which is growing and protable, and arms us with four very
signicant competitive advantages:
1. Personalization and effortless discovery
2. Monetization
3. Scale
4. Data
Personalization and Effortless Discovery
Our expertise in personalization and effortless discovery powers our leading listening experience, resulting in the
largest, most engaged audience in streaming music. Even in the face of massive investment and marketing from large,
direct competitors, our time spent listening per month, per user continues to increase, demonstrating the incredible
value of the Music Genome Project data and precise listener feedback. And this value and precision grows by the day.
Monetization
We’ve proven Pandora’s ability to monetize free-to-the-listener streaming radio far better than anyone, and are leading
the disruption of the $17 billion U.S. radio advertising market. Our core revenue grew 27% in 2015 to $933.3 million.
Total advertising RPMs (revenue per thousand hours) for the year expanded 21% versus 2014, and gained momentum
each quarter to reach $50.52 for the year. Just recently, we saw iTunes Radio cease to be a free advertising supported
product, underscoring what we have known for a long time —building a business like we have is difcult, with immense
barriers to entry. We are now the leader in creating an ad-supported listening experience.
Scale
Our scale and ubiquity is unmatched by any other US music service. As of the end of 2015, we are at an all-time high
of more than 10% share of US radio listening. We reached more than 80 million active users during the 30-day period
that ended December 31, 2015, and engagement continued to grow to approximately 22 hours a month per active
user as of December 2015—more than double the next closest music service. Our footprint extends to over 100
million mobile phones, over 1,700 consumer electronic devices, and into more than 190 car models through native in-dash
integrations. We have the opportunity to substantially increase hours by achieving our fair share of listening in the car alone.
Consumer electronics activations increased 38% to 32 million, while related listening hours grew 26% year-over-year.
Auto activations increased an astounding 65% to 15.5 million, with listening hours increasing 55% year-over-year.
This momentum is driving engagement. For example, an analysis of auto listening hours before and after, showed
that using an in-car Pandora integration increased listening by over 24%. We are growing and investing where the
consumption model is heading, fueling future growth for years to come for Pandora.
Data
Data is the foundation for virtually every part of our business. From the playlist personalization engine to the ad
targeting capability, we have turned even more to data science. Every year brings billions of more listening hours with