Catching Pandora In Their Lies


(Bob McCurdy) Late last week I was on and came across a banner ad for Pandora’s 2018 Definitive Guide to Audio. I clicked. As one would expect, there was a whole lotta skewing going on. The following looks to set the record straight.

Pandora: Between 2007 and 2017, average daily time spent listening to radio has fallen by 34%.

Pandora doesn’t reference the PPM methodological change implemented by Arbitron. Makes for a good headline but purposely misleading.

Pandora: With a median age of 52, radio has the oldest audience among the audio platforms.

Let’s look at the 12+ median age of radio from a cross-section of markets: Philly (45), Boston (45), Charlotte (44), Augusta (43), Fayetteville (40), Las Vegas (43), Wilmington (45), Middlesex (45). The median age of the United States of those 10+ is 46. It should be no surprise that radio, a medium that reaches virtually everyone, has a median age that reflects the population. Darned near mathematically impossible for it not to.

Pandora: Radio’s long-held dominance in the car is crumbling as more connected vehicles hit the road. Other foreboding motor trends that are likely to impact AM/FM usage include a shrinking proportion of licensed drivers, fewer privately owned cars, and the promise of autonomous vehicles.

The words “crumbling” and “foreboding” are simply over-the-top. Several paragraphs later, Pandora quotes AM/FM radio’s share of in-car listening at 70%. That figure is hardly “crumbling” and actually quite dominating. Autonomous vehicles will present a challenge and opportunity for many forms of media and businesses, including radio. But level 5 (full autonomy) is several years away, and with 17,000,000 cars sold annually, and 260,000,000 cars on the road, it will take years to proliferate.

Pandora: Voice control of smart speakers and other devices reflect not only a technological achievement, but is revolutionizing the way we interact with all Internet devices moving forward.

AM/FM broadcasters are excited about getting back into the home with these devices, and according to Bridge Research it will lead to more AM/FM listening. Their recent study found that 55% of all smart-speaker users listened to FM radio (#1 Music option). NPR/Edison also found that heavy smart-speaker owners are using their devices to listen to AM/FM radio in large numbers. A long term “positive” for radio.

Pandora: As much as the radio industry loves to promote its wide reach, another critical metric, time spent listening, has been riding a steady decline. Daily time spent listening to AM/FM has fallen 34% between 2007 and 2017. Clearly, listeners are not using AM/FM for as long or as often as they did before.

The methodological changes referenced above contributed to the “illusion” of declining TSL. Since Pandora likes quoting stats from Nielsen, let’s quote one from their Q2 2017 Total Audience Report which shows radio TSL among “listeners” to be steady from 2015-2017 (hours: minutes): 2:42, 2:44, 2:43.

Nielsen’s Q2 2017 Comparable Metric Report highlights the magnitude of AM/FM radio listening, concluding that in an average week 188.6 billion minutes of AM/FM programming are consumed, versus 13.4 billion minutes of streamed audio on a smart phone, computer or tablet, meaning that AM/FM usage is 14x that of streamed audio.

Since Pandora referenced radio’s “reach,” let’s note that the same percentage of Americans are tuning to radio weekly in 2017 as did in 1970, and they are tuning in more than five days/week. Not bad.

Pandora: Self-Inflicted wounds. Music stations will pack as many as 10 ads into a break as a strategy to game the ratings system, but that strategy can’t possibly help an advertiser command attention; besides more ads equal unhappy listeners.

Pandora knows about unhappy listeners. Per a 2017 Digital Music News headline, “Pandora Is Losing 850,000 Listeners a Month.” As of November 2017, the company had 73 million active users. At the start of 2017, that number was 81 million.

There was more bad news for Pandora in 2017, with a Piper Jaffray study finding that teens are turning their backs on Pandora at a staggering rate. Piper Jaffray asked teens the question: “Do you listen to music on Pandora.” Only 35% of respondents said “yes.” Some context as to how brutal that is, in 2014 74% answered “yes” to the same question.

One more bad-news stat: Pandora’s net loss expanded in Q3 2017, from $61.5 million to $66.2 million.

Regarding commercials, Pandora seems to be seems to be quite adept at adding them:

2007: Pandora begins experimenting with audio ads.

2009: Pandora begins airing one :15 per hour.

2010- April 2012: Pandora begins airing two :15’s per hour, adds :30’s to their commercial mix.

2012: Pandora begins airing three commercials per hour.

2013: Pandora begins airing up to five commercials per hour.

2014: Pandora’s commercial load is up to six units per hour.

2017: Pandora’s commercial load is up to nine units/hr.

In a 10-year period, Pandora has gone from no commercials to nine per hour. Maybe this is why a major retailer stated that Pandora listeners light up social media in anger, “complaining bitterly about hearing their ad over and over.”

Research has shown time and again that listeners are more tolerant of commercials on AM/FM than streamed audio. A study done several years ago by Arbitron that included second-by-second analysis of over 18 million commercial pods confirmed this, finding that the audience throughout a commercial pod is 93% as large as it was immediately prior. For some context, compare this stat to 21% of TV viewers who leave the room during a break and 40% whose eyes are on a second screen during a TV commercial break. Pretty good.

Additionally, Nielsen’s ROAS studies have continually demonstrated that radio, with its current commercial load, delivers a huge return on ad spend, so radio commercials are doing their job.

Some additional Pandora insights culled from the past year:

Commercial frequency overkill: This issue will only get worse due to Pandora’s decreased listenership and the need to meet “impression goals.”

“Empty room” syndrome: Two-thirds of all Pandora listening occurs at home and no one has any idea if anyone is in the room or even in the house. Not an issue with PPM.

Five percent of the U.S. population accounts for 72% of all Pandora listening according to an Edison Share of Ear study. The same study also showed AM/FM share of audio to be steady.

While every individual, company, or industry has to earn its future, radio is in a solid position to maintain its audio dominance for many years to come.

What’s that saying about “glass houses?”

Bob McCurdy is The Vice President of Sales for The Beasley Media Group and can be reached at [email protected]


  1. Great article, but it will not change listening habits. You don’t mention the other gorilla in the room, satellite radio. What are the stats on that?

  2. Always at the ready with the stats, Bob. One thing I would correct is this: People are not listening to “AM/FM” radio with their smart speakers. This is simply impossible. There is no tuner in the smart speaker. And therein lies Radio’s biggest challenge. There’s no AM/FM tuner in a smart phone. There’s no AM/FM tuner in a Smart Speaker. There’s fewer AM/FM tuners build into new car entertainment systems. There are fewer AM/FM clock radios on the night stand next to people’s beds. The one place where AM/FM radio still dominates is in the car. But even that future will be bleak unless something substantial happens. Just saying.

  3. Great article Bob. As always dead on with your facts. The domination of radio continues as far as reaching the masses and delivery on ROI (Nielsen Catalina study). I hope that radio does come up with a strong back-end attribution model to further prove this point. Pandora’s IPO came out at $17 almost 7 years ago and is currently trading at $5 (down almost 300%). During the same time period the Nasdaq has traded almost 3x 2011 levels. Over the last 5 years Pandora has lost $700m. Most of the reasons are directly related to Bob’s points. Loss of audience, a business model that is flawed and no real studies on ROI by using Pandora (outside of a few testimonials). Add to that the lack of proof as to whether anyone is actually listening (no prompting on a mobile devise-80% of their listeners), no tracking devise to understand GEO location and no real proof as to whether the registration process is accurate as it remains a non-social login. To Phil’s point there is no doubt that radio has been disrupted over the last 5-10 years with a methodology change, new audio competitors and digital in general. However, Balance sheets of companies like Entercom, Beasley, Hubbard and Bonneville are solid (in some cases very solid). Next steps for radio have to be better back-end attribution and true convergence of digital and radio combined for advertisers and the marketing of stations in general.

    • Stock prices have nothing to do with how an advertising medium works for a client. if that were the case no one would be buying the top 2 radio ownership groups. iHeart has more debt than Nigeria.

  4. Pandora has definitely encountered some challenges lately, but to think Radio is not in a worse position is beyond the pale. The health of the radio industry is at an all time low. The #1 ‘Radio’ company is over $20B in debt with $8B due in 2019, and you can’t stop that train. #2 Entercom has MASSIVE cuts still to come, and #3 Cumulus is in the beginning stages of bankruptcy. This article reeks of desperation, which is an ongoing occurrence in Radio right now. Let’s not even get into the fact that your stats point mostly to Nielsen, who has a GOAL to achieve 80,000 active PPMs in the US. this goal represents a paltry .02% of the population. That’s accuracy? I digress…

    Everyone has sales stats, Bob. Radio has been pumping inaccurate numbers for years, it should be familiar. I am guessing you should not be so easily triggered if Pandora was not impacting sales at your radio stations.

    • iHeart, Entercom, and Cumulus have much to sort out. But as a 30 year old Account Executive in radio who has plenty of years left in his career and could easily go sell TV, digital, or even Pandora, or get out of advertising altogether…. I love waking up every day to do what I do in local radio. If those three companies crumble, it’s their own doing. The 15+ unit breaks may backfire on them sooner than later on a very large scale. If and when that happens, there are plenty of other radio groups who will step up to take their place as the leaders.

      Where I work, our listeners worship our stations and our clients get results, and that is the bottom line. Television is indexing far older than radio, digital is the wild wild west and one agency after the next is re-assessing how much they really should be spending in digital and putting back into traditional, and the situation at Pandora speaks for itself.

    • Since you’re bringing up financials, let’s look at the financials of Pandora: In their 17 year history, they have yet to turn a profit. They just took another huge hit as the music industry announced a rate hike for 2019. That will mean they will either have to increase their spotload, or increase subscription fees, or continue to lose money. In the last six months their stock has lost 50% of its value. They haven’t invested any money in developing on-air content or talent. And now they’re being hit by Spotify, who is offering users more options. Without the bailout from Sirius, Pandora might have been in a very similar situation as companies like Cumulus.

      • I started my comment by saying P has their own financial issues and challenges. VERY true and i am not investing my money there. but, i brought up financials because Bob did re: Pandora’s losses, which are a fraction of the Radio industry. you also mention that Pandora has “lost 50% of it’s value” referring to it’s stock price. you want to know what iHeart’s stock price is? it’s down to $0.55 as of today from $1.55 6 months ago (+/- depending on the day). that’s 60% give or take. CMLS was at $0.43 6 months ago and is now at $0.065 (yes, less than 7 cents). down 84%. i started out by saying Pandora has it’s own issues financially, but Bob is the one throwing stones while living in a glass house. he also mentions “playing to an empty room” and a number of other inaccuracies I won’t get into on this thread. the same company (Edison) he refers to conducting the “share of ear” study has a study called ‘Hacking the Commuter Code’ that only 29% of listeners sticking through an entire commercial break on Radio. talk about an empty room. and when was the last time radio invested in content or talent? that and the constant CUTBACKS/commission cuts were the reason I left radio over 5 years ago. If you are listening to the radio, you can hear the content continue to suffer because of it. Bottom line, I do think Radio still has a LOT to offer advertisers. i was in Radio for well over a decade in the #2 market in the country. If I were a seller looking for inspiration, I think my time would be better spent reading about what radio CAN bring to the table instead of what Pandora CAN’T. When you start getting defensive and negative, it is never a good look.

        • ” you want to know what iHeart’s stock price is?”

          iHeart is not a public company. The small nub of stock is not the radio part. The reason iHeart has debt is it bought back all of its stock to go private. As you say, stock price has nothing to do with how a medium works for the client. You haven’t addressed the my point that Pandora hasn’t invested any money in content creation. Name Pandora talent.

  5. Good stuff Bob, I hope the local am/fm radio managers out there check what their sellers are saying. I have seen WAY too many “purposely misleading” headlines even from McCurdy Trained sellers.
    Stay above the fray and win!
    …. and remember numbers don’t buy cars, people buy cars.
    It’s all about the results.

  6. Even as Bob reports with accuracy and some righteous indignation, what does that do for the situation in which radio, generally, finds itself?

  7. Interesting article. Out of curiosity why did you pick those cities for median age? Is there data for NYC, Chicago, LA, Houston…. would be interested to see if they are the same.


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