Pandora Shows That A Media Business Can Grow Around Mobile Ads

Pandora reported total mobile revenue growth of 92% year-over-year, according to the company’s earnings released last week.

That puts Pandora’s mobile revenue at $US116 million, almost 72% of total revenue, up significantly from a 65% share last quarter.

More than ever, Pandora is a mobile-first company, and its efforts to build a media business around mobile advertising make it a bellwether for the industry.

In the recent past, Pandora seemed to be struggling to monetise mobile effectively.

The company even saw its RPM rate, the amount of revenue it could command for a thousand advertisements, decline in recent quarters.

But this past quarter it accomplished a 180-degree performance turnaround.

Pandora’s RPM rate jumped 52% compared to the same quarter last year, and 39% compared to the prior quarter.

Pandora executives have attributed the impressive mobile numbers to app improvements and bulked-up efforts to sell locally targeted ads.

Pandora has improved its ad revenue picture enough that it now feels confident lifting its 40-hour-per-month listening cap for free mobile users, despite the increased content licensing costs that will bring.

The end of the 40-hour cap could also be seen as a preemptive defensive tactic against the expected September launch of Apple’s iTunes radio streaming service.

Click here for this dataset in Excel.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.