Sometimes you’d see this amazing, pricey gold watch in a shop window and you’d wish you had one just like it. The urge to just hop in and buy it, adding to your credit debt, is almost irresistible. In the end, you usually just walk on by.
Pandora Media, Inc (NYSE:P) has been similarly eyeing the market for its radio service outside of the USA. It seems like this would be a bit of a stretch, though. The company stock has been bobbing all over the place in the last months, with highs of around $12 compared to yesterday’s $9.12 close.
Recent press releases from the company announced that it has actually significantly expanded its active listener base in the US by a solid 51% amounting to 18 million users compared to 2011.
The company launched its beta web-only service in Australia and New Zealand this summer and is currently running it ad-free for all customers. What is stopping Pandora from expanding to other markets then? The company itself deems expansion outside of the USA as generally “prohibitively expensive” due to the lack of a consolidated institution which handles international royalties.
The latest 10-Q filing reports the following numbers:[BANNER]
- ad revenue up by nearly $30 million
- net loss of $20 million, primarily due to content acquisitions
The money Pandora is making comes primarily from advertisement, with only 13% of quarterly revenue from paid subscriptions. If their business plan for the AU/NZ territories pulls through and they launch paid ads along with a mobile service soon, they may see growth in the region. This might enable them to rear their head and steady their volatile stock before competitors like Spotify start sinking their teeth deeper into Pandora’s market.
