selling against pandora in 2014
DESCRIPTION
For those radio sellers that are interested in understanding how to sell against Pandora Radio.TRANSCRIPT
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Evolution of the Audio Consumer & Advertiser
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• 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
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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
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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
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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
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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
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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
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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”
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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
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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
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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
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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.
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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
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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
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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
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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
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Pandora Financials
2011 Q1
Q2 Q3 Q4 2012 Q1
Q2 Q3 Q4 2013 Q1
Q2 Q3 Q40
50
100
150
200
250
RevenueExpenses
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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