Pandora Touts Personalization as Part of New Update

Need to Know

• Pandora is updating its mobile app experience with a new multichannel ad campaign.
• This app update is looking to compete with Spotify by improving personalization and generating revenue from in-app ads.
• The multichannel campaign will culminate with a live-streamed concert and silent disco in NYC’s Times Square.
• Pandora is the most popular music-streaming service in the US, with over 72 million monthly users. Spotify is second with over 65 million.

Analysis

In celebration of an updated and redesigned mobile app experience, Pandora has launched a multichannel ad campaign and is partnering with some of the country’s most recognized brands and artists. 

In a bid to compete with other streaming giants, the app has iterated on its personalization capabilities by adding a new “For You” tab, which offers a unique experience for each Pandora user, along with other customization features. These features are now available to all users.

“Already, we’ve seen twice as much engagement with the new ‘For You’ discovery feed than the traditional Browse feature it replaced, with listeners enjoying access to more of Pandora’s vast catalog of on-demand content than ever before,” said Denise Karkos, CMO of SiriusXM and Pandora.

The new update also includes ad-supported services that connect various brands to Pandora’s audience. Heinekin has signed on as a launch partner.

Not unlike Spotify’s functionality, users can access premium features such as full albums, premium playlists, and new music, all by watching a 15-second ad rather than paying a monthly subscription fee. 

Pandora is also launching a nationwide brand campaign that will feature a live-streamed concert with pop artist Halsey that will transform into a “silent disco” of people dancing with headphones on—all in New York City’s Times Square. The streaming service hopes the event will help connect the brand with millennial users who are familiar with silent discos or fans of Halsey. 

The campaign also features significant out-of-home activations, such as interactive murals to generate publicity.

In 2019’s third quarter, Pandora’s ad revenue rose 8% to a record $315 million from the year before. However, despite those gains, the streaming brand’s user base fell 8.3% and listening hours have declined by 7.5%. Pandora’s audience is expected to dip below 72 million by 2021. Comparatively, Pandora’s top competitor, Spotify, continues to see its audience grow, and is expected to reach 73.7 million users by 2021. 

In late 2018, SiriusXM acquired Pandora at a valuation of $3.5 billion.