Radio Can’t Get Over Pandora
I’ll have to admit, it’s been a few years since I’ve seen a Pandora hit piece published in Radio Ink like the one featured this morning. In it the author makes arguments against Pandora which are straight outta 2013. Pandora has had a seat at the radio table for the better part of a decade now and takes in about 10% of both listenership and ad revenue compared to the 16,151 AM/FM radio stations in the US. That’s an impressive number for one publisher, but at a 10-share Pandora isn’t going to put the entire radio industry out of business anytime soon. The broader point the article misses is the fundamental change happening across both audio consumption and advertising as a whole.
First let’s talk about the audio space. According to Edison Research’s 2019 Infinite Dial Report all forms of streaming now make up 18% of audio consumption in the US, and broadcast radio has now fallen into the minority at 49%. This is because listeners are migrating their audio time spent from broadcast to digital – over the past five years AM/FM radio has lost 19% of their total time spent listening due to this. While some of broadcast radio’s TSL erosion is shifting to Pandora, it’s also going to Apple Music, Spotify, Amazon, etc..
Now step back and consider what’s happening across the entire US media landscape. According to eMarketer in 2019 total digital media spending is expected to grow by 19% YoY to $129B. Digital giants like Google and Facebook will grow their ad revenue haul by more than the entire radio industry will bill this year. So while Pandora makes a convenient “next closest neighbor” target for broadcast radio to complain about, the real existential threat is coming from an entire Digital industry that’s steadily taking over all things media.
I’m sure today’s Radio Ink piece was inspired by last week’s SiriusXM Q2 earnings call, which included Pandora’s +13% YoY revenue growth. That stat has to look pretty impressive compared to the broadcasters’ flattish rev numbers over the past several years. But Radio’s real boogeyman isn’t Pandora, it’s an entire media universe that’s inevitably shifting from traditional to digital platforms.