Pandora Media Inc. (P), the biggest Internet radio company, is considering expanding its programming beyond music to formats such as sports, news and talk as the service becomes more available in cars and can attract listeners on the road.
“Music’s an important piece of radio listening in the car, but if there’s a place where spoken word is also equally, and more important really, it’s in the car,” Pandora Chief Financial Officer Michael Herring said in an interview. He said it’s too early to specify the content or timing.
Pandora, which makes money from ad sales and ad-free subscriptions, is looking to autos as one way to jump start growth as the number of active users stalls amid competition with Spotify Ltd., Apple Inc. and Google Inc. The company’s active listeners grew 7.5 percent to 76.4 million users in the second quarter compared with a rise of 30 percent a year earlier.
Cars may be a way to revive listener growth: During a conference call last week, Pandora executives pointed to the company’s 7 million automobile users in the last quarter, up from 2.5 million a year earlier.
Herring cited Sirius XM Holdings Inc. (SIRI), the satellite radio service that’s distributed through automakers and broadcasts a wide range of content including Howard Stern and the National Football League.
“As the car becomes more important, thinking about other types of content that are important for the car becomes more critical,” Herring said. “That’s why Sirius spends so much money on Howard Stern, sports and news.”
Shares of Pandora rose 3.1 percent to $25.30 at the close in New York. They have declined 4.9 percent this year.
Pandora can be accessed in 33 percent of new cars in the U.S. while Sirius is installed in 71 percent, according to Corey Barrett, an analyst at Pacific Crest Securities LLC in Portland, Oregon. Pandora converts about 30 percent to in-car listeners, Barrett estimated.
Barrett projects Oakland, California-based Pandora to double its 7 million automobile users to 15 million by 2017.
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