How Pandora Plans To Hit 100 Million Users

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By the end of the next five years (by 2020), Pandora hopes to have 100 million active and engaged users. And the goal is to get 10% of those users to pay for a streaming product.

As of today, Pandora has 78 million users, and 4 million — or 5% — of those users pay for the product. Pandora executives are banking that the shift in the business, with a menu of tiered streaming services — they call it diversification — will help the company increase its users over the next five years.

CFO Mike Herring said the goal is to get casual users to become frequent users. CEO Tim Westergren said, “We’ve spent 10 years watching our customers use our products. We know where the value proposition is, where we can convert them to paying customers.” The company believes the enhanced features and offerings that will be unveiled with the new products will do that. Westergren said during Tuesday’s special conference call that the future is to be hyper-personalized.

The initial rollout of the new streaming features will be to Pandora’s current customer base. That’s to keep customer acquisition costs down, which they can obviously do by delivering those customers ads and e-mails.

The company expects Pandora to become a $4 billion business over the next five years; 65% to 70% of Pandora’s revenue goes toward the cost of content.

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