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The Fall of Pandora Radio

A Streaming service faces buyout

Pandora Radio released in 2005, and upon its release it was very popular because they offered something that the audience really wanted: automated music recommendations. Pandora makes music stations based on select artists. Today, Pandora is trying to stay afloat. 

In 2017, Pandora laid off seven percent of its workforce. In January of 2018, they cut another five percent. Greater still, in 2017, Pandora ceased operation in two out of three countries, now running solely in the United States. 

Pandora’s playlists can be tweaked by placing a thumbs up or thumbs down on each song. Not only that, but all of Pandora’s music selection is based on The Music Genome Project. This creation focuses on the qualities that the music possesses instead of categorizing songs by genre. For example, the workers who categorize this music focus on things like melody, harmony, composition, and lyrics.

Around Pandora’s inception, similar streaming services such as iTunes and Spotify were also emerging. These services eventually toppled the online radio due to their on-demand approach. People wanted to play the music they wanted and when they wanted it. The other services excelled while Pandora floundered.

Pandora Premium was born on March 15, 2017 as a result of the radio trying to stay relevant. Pandora states on their FAQ that this new deal offers “the ability to search and play songs on-demand. With Pandora Premium you can create fully customizable playlists, access as much of your music collection offline as your mobile device will allow, and you’ll have higher quality audio and longer time-outs than Pandora Plus subscribers.” Clearly, Pandora is attempting to match pace with their competitors. These changes push the company to the same level as the rest—albeit, a bit late to the game.

Pandora’s edition of premium services comes too late. Illustration credit: Alex Gomez · The Sentry

Currently, Pandora Radio’s stocks have grown, but their user base keeps dropping as they look for other streaming services. According to Rick Munarriz’s  article in The Motley Fool, “Can Pandora Stock Double Again in 2019?,” Pandora is making the best out of a bad situation by starting a subscription service and making the sales of their ads higher. Active listeners still dropped from 76 million to 71.4 in 2018. Munarriz said that “the growth isn’t sustainable if the listeners keep bolting for rival offerings, and profitability is at least three years away, according to analyst models. However, the stock is clearly back in favor.”

There will be a merger between Sirius XM and Pandora Radio in early 2019. Sirius will receive a free tier and access to Pandora’s ad selling strengths. Pandora will offer an in-car presence and receive better financing. There won’t be any major changes to the listening platform yet, as announced on Sirius XM’s website. 

After the announcement, Pandora’s stocks rose three percent, and Sirius’ stocks dropped more than six percent, according to Sean Burch’s article on The Wrap.

Whatever the future holds for Pandora Radio, it’s sure to be a bumpy ride. The only question that remains is if they’re able to make a comeback.

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