Spotify Grows, Pandora Slows

spotify vs pandora

Do you have a Spotify or Pandora account to listen to music? As a college student, I can safely say that almost every single one of my friends on campus and at home also has a Spotify or Pandora account. In my case, I have both. I stumbled upon Pandora around my junior year of High School when I saw it allowed me to make stations and base my music off of those genres. However, I couldn’t truly listen to the music I wanted to because Pandora didn’t allow me to pick and choose my songs freely. I was introduced to Spotify during my freshman semester at college when my roommate told me it allows you to pick and choose the songs you want and put them into a playlist. At last, a truly free music site that allowed me to pick my own music! While I do not have the paid version, Spotify still allows me to pick the songs and put them in a playlist, so no matter what song comes on it is a song that I chose myself. In reading some articles, it has come to my attention that Pandora has started to slow down, while Spotify seems to be hitting its stride. Let’s take a look at some numbers and see how each of these companies has been doing in the digital age.

Driven by mobile usage, the number of paid Spotify subscribers has grown to over 10 million globally. According to sources, Spotify has grown to more than 3 million paid subscribers in less than three years since the launch in the U.S. in July 2011. Spotify also currently has 40 million monthly active users (which includes the 10 million paid subscribers). This data shows that Spotify is currently the biggest and most likely the fastest growing of similar music services like Rhapsody and Beats Music. Spotify CEO Daniel Ek said, “We’ve really become a mobile first company.” Ek’s comment shows true due to the fact that 80% of all subscribers sign up through mobile phones. On top of this data, U.S. paid subscription revenues rose 57% to $628 million last year. While Spotify has a relative new growth, it seems to be fairing much better than Pandora.

In its latest earnings report, Pandora media’s growth slowed to 5.2% in the third quarter. One problem may be due to their lack of focus on the user. It is apparent in a statement made by CFO Mike Herring. He said, “We needed to get monetization in place before looking to grow listeners. We’re relatively new to this marketing, customer-acquisition world, and we do have ambitions to grow user significantly in the U.S.” While they want to grow users, they cannot focus on them until they have monetization down, which it is apparent that they currently do not. On top of this, Pandora shares are down 13% during 2014. While Pandora is still doing well in terms of profit and listeners, it is apparent that something must change before it is too late and they become “out of style.”

There is no doubt that Spotify and Pandora are currently two of the most widely used mobile music platforms on the market today. Spotify offers users the ability to select their own songs and listen to the music they want to. While Spotify has a monthly fee of $10 compared to Pandora’s $4.99, it is clear that people are willing to pay a little extra for ad free listening that also allows them to pick and choose the exact songs they want to listen to, when they want to listen to them. From personal experience, I can honestly say that I use Spotify on a much more regular basis than Pandora. So what site do you find more appealing and why?

 

Links: http://adage.com/article/media/pandora-listener-growth-slows/295569/

http://www.billboard.com/biz/articles/news/digital-and-mobile/6092226/spotify-now-has-10-million-paid-subscribers-3-million