Pandora Media Inc. (NYSE:P) said Thursday it has more listeners than ever and more paying subscribers in the second quarter of 2014, despite increased competition from a number of tech titans.
Pandora reported Thursday afternoon a 38 percent rise in revenue during the second quarter, meeting Wall Street expectations. The Internet radio service earned 4 cents per share on $218.9 billion in revenue. Analysts had expected $218.81 billion in revenue with EPS of 3 cents, according to a poll by Thomson Reuters.
Pandora said its service grew despite increased pressure from Silicon Valley heavyweights like Google Inc. (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL) both launching music services of their own. Pandora said mobile advertising made up 76 percent of its total ad revenue in the second quarter, up from 52 percent during the same period in 2013.
Pandora’s gross profits in the second quarter rose nearly 50 percent to $93 million. Advertising revenue was up 39 percent, while revenue from subscriptions rose 35 percent. Pandora said the total amount of time that users spent listening to its Internet radio stations rose to 5 billion hours during the second quarter, compared to 3.91 billion during the same time last year.
The company began charging new subscribers more during the second quarter, raising the cost of Pandora One by $1 to $5 per month in May. Pandora said at the time it was raising prices to correspond with increased operating costs, largely due to the royalties it pays for music. Pandora eliminated a $36 annual subscription, but did not raise prices for existing subscribers.
Pandora must continue to pay a 1.85 percent royalty rate to the American Society of Composers, Authors and Publishers, a court ruled in March. While Pandora argued that it should only pay 1.7 percent, the same as broadcast radio stations, ASCAP was asking a gradual increase to 3 percent.