Pandora made $80M in U.S. app store revenue in Q3, booting Netflix from the top grossing spot
In the face of fierce competitors from Spotify and Apple Music, Pandora has been rising its in-app subscription revenues, in keeping with new information from Sensor Tower. The streaming music service earned the primary spot on the chart of top grossing apps in Q3 2017, excluding video games. It’s the first time Pandora has held that place since the third quarter of 2015.
Fueling the music app’s rise was this yr’s launch of its Premium tier, which arrived in March in invite-only mode earlier than turning into broadly out there to customers in April.
Pandora Premium is the firm’s personal tackle on-demand music, providing a mixture of the radio-like listening Pandora is understood for, together with the potential to go looking out and play tracks on demand and add them to playlists. The service prices $9.99 monthly, which can be the going price for Pandora’s rivals, Spotify and Apple Music.
In addition, Pandora affords a mid-tier service referred to as Pandora Plus, which debuted in fall 2016. For $four.99 monthly, customers can skip and replay extra songs, hear offline, and keep away from promoting.
Pandora achieved its rating as the primary app by revenue in the U.S. in Q3 by grossing $80 million throughout the quarter.
That pushed it forward of Netflix, which has held the top rating on this chart for a number of quarters. However, Netflix was nonetheless the primary app by revenue globally (once more, excluding video games) in Q3.
Pandora’s $80 million determine additionally represents 142 p.c revenue progress over the identical quarter final yr, when Pandora’s estimated gross revenue was $35 million.
To be clear, Sensor Tower’s look into app store revenue is just consists of in-app spending, which doesn’t paint an image of Pandora’s enterprise as an entire. In addition to subscriptions, which will also be purchased on the internet, Pandora has a free tier powered by adverts. That enterprise grew its revenue 5 p.c year-over-year as of Pandora’s final earnings, whereas subscription revenue was then up by 25 p.c.
Pandora’s earnings reported in July had been higher than anticipated, following 1 / 4 that noticed quite a lot of chaos, together with the exit of CEO Tim Westergren amid an organization shakeup, and the infusion of $480 million from SiriusXM, after Pandora stopped looking for a purchaser.
The firm is ready to announce earnings at the moment, with new CEO Roger Lynch delving into his plan for Pandora going ahead. This might embody a stronger deal with Pandora’s radio enterprise, Barron’s reported in an earnings preview.
Analysts expect that Pandora misplaced eight cents per share in the previous quarter on revenue of $380 million, it additionally stated.
The progress in non-game app revenue just isn’t a pattern that’s distinctive to Pandora. Sensor Tower additionally discovered that worldwide shopper spend in non-gaming apps elevated from roughly $1.7 billion throughout Q3 2016 throughout each Google Play and the iOS App Store, to succeed in $2.eight billion in Q3 2017.
App Annie had additionally beforehand reported file app revenue globally. Its whole, which incorporates video games, was practically $17 billion.