Spotify Growth Accelerates, But Can It Knock-Off Pandora (P)?
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Spotify may be accelerating its user base, but it's not close to one of its fiercest competitors: Pandora (NYSE: P).
According to reports and data issued Thursday, Spotify added 500,000 users in December to bring its total number to over 3 million active paying users. Spotify's ratio of paying subscribers to active free users now stands at over 20 percent, up from just 15 percent last March, when it crossed the 1 million sub mark according to the company.
Fast Company noted Spotify's growth is now outpacing that of Netflix (Nasdaq: NFLX) and closer-competitor Sirius XM (Nasdaq: SIRI). Last quarter, Netflix reported adding net 610,000 users while Sirius gained 334,000.
However, from Pandora's second to third quarter, the streaming service gained 3 million accounts to 40 million at the end of October. That's a staggering 33,333 per day, compared with the 8,000 per day Spotify tacked on. Pandora does issue some caution, saying, "[a]ctive users are defined as the number of distinct registered users that have requested audio from our servers within the trailing 30 days to the end of the final calendar month of the period. The number of active users may overstate the number of unique individuals who actively use our service within a month as one individual may register for, and use, multiple accounts" (emphasis ours).
Still, although Spotify launched in the U.S. only a few months ago and also has tight ties to Facebook (via Open Graph), the acceleration in its user growth is impressive. Notably, FC said Netflix got from 2.5 million to 3 million subs in roughly the same time frame as Spotify.
It's not clear what Pandora's conversion rate is, though subscription revs were about $9 million last quarter. Based on 40 million active users, a $36 annual fee, and $0.99 fee for free users who exceed 40 hours of listening and want to continue for the month, that might mean paying users of 1 million or just over that mark -- something which alone points to the difference in models between Spotify and Pandora.
But will Spotify knock-off Pandora? Maybe, because Pandora only allows for random streaming, while Spotify allows for the creation of playlists and sharing. But Pandora is also working its way into other sectors like automotive, where it hopes to compete with Sirius more wholly.
Well, whether you enjoy Spotify, Pandora, or Sirius, competition in the streaming audio segment is heating up all to the benefit of users as companies roll out new, innovative features to attract listeners.
Pandora and Netflix shares are up on the session, while Sirius shares are trading lower.
According to reports and data issued Thursday, Spotify added 500,000 users in December to bring its total number to over 3 million active paying users. Spotify's ratio of paying subscribers to active free users now stands at over 20 percent, up from just 15 percent last March, when it crossed the 1 million sub mark according to the company.
Fast Company noted Spotify's growth is now outpacing that of Netflix (Nasdaq: NFLX) and closer-competitor Sirius XM (Nasdaq: SIRI). Last quarter, Netflix reported adding net 610,000 users while Sirius gained 334,000.
However, from Pandora's second to third quarter, the streaming service gained 3 million accounts to 40 million at the end of October. That's a staggering 33,333 per day, compared with the 8,000 per day Spotify tacked on. Pandora does issue some caution, saying, "[a]ctive users are defined as the number of distinct registered users that have requested audio from our servers within the trailing 30 days to the end of the final calendar month of the period. The number of active users may overstate the number of unique individuals who actively use our service within a month as one individual may register for, and use, multiple accounts" (emphasis ours).
Still, although Spotify launched in the U.S. only a few months ago and also has tight ties to Facebook (via Open Graph), the acceleration in its user growth is impressive. Notably, FC said Netflix got from 2.5 million to 3 million subs in roughly the same time frame as Spotify.
It's not clear what Pandora's conversion rate is, though subscription revs were about $9 million last quarter. Based on 40 million active users, a $36 annual fee, and $0.99 fee for free users who exceed 40 hours of listening and want to continue for the month, that might mean paying users of 1 million or just over that mark -- something which alone points to the difference in models between Spotify and Pandora.
But will Spotify knock-off Pandora? Maybe, because Pandora only allows for random streaming, while Spotify allows for the creation of playlists and sharing. But Pandora is also working its way into other sectors like automotive, where it hopes to compete with Sirius more wholly.
Well, whether you enjoy Spotify, Pandora, or Sirius, competition in the streaming audio segment is heating up all to the benefit of users as companies roll out new, innovative features to attract listeners.
Pandora and Netflix shares are up on the session, while Sirius shares are trading lower.
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