Pandora reported big losses for the most recent quarter, and its shares tanked on Wall Street as a result. Pandora's CEO blames the recent launch of Apple Music for a downtick in subscribers but says the overall subscriber trend is positive.
While music-streaming services have been getting a lot of headlines lately, news on the Pandora front has been relatively quiet. Apple Music has been the most actively discussed music streamer and was heavily hyped upon its launch in June.
Spotify has also been in the news lately, due in part to the increasing backlash from artists who are frustrated with the company's compensation policies for streaming their content. The service appears to be on a roll in subscriber growth, however, and has recently stated it expects to have nearly 100 million subscribers by the end of 2015, up from a reported 75 million to date.
Pandora is back in the headlines, due to its recent earnings report, which shows the company losing big in the most recent quarter. The company's woes can be partially attributed to a large payout for the use of oldie recordings in a settlement the company recently reached over that material.
Of more concern may be a recent downtick in subscribers. Even though Pandora gained 1.6 million subscribers since last year, it actually lost 1.6 percent of its subscriber base in the recent quarter. Nevertheless, CEO Brian McAndrews said things look better long term and blames the decline on the launch of Apple Music.
"This was obviously a unique quarter in the streaming music business. The June 30, launch of Apple Music with its 3-month free trial, as well as significant category spending and trial offers across multiple players, brought increased focus to the broader on-demand category during this period." McAndrews said in an earnings conference call.
McAndrews views the period as a glitch rather than a trend, and downplayed the impact of Apple Music by comparing it with the previous launch of iTunes Radio in 2013. "I am pleased to say that, given the scale of press and consumer attention on this launch, the impact on our active users and listening hours was muted and was, in fact, consistent with what we experienced during the launch of Apple's radio service in 2013," he said.
Wall Street literally wasn't buying it, however, as shares of the company tanked after the announcement, at one point losing around a third of their value.
