Pandora loses another 6.5 million listeners in just one year

Pandora has been a great source for internet radio streaming and music recomendations. But despite the efforts of SiriusXM buying out the service, there is still bad news going on at Pandora, as it had annouced in the second quarter of 2019 (about June 2019) it had annouced it had 64.9 million active users, a 6.5 million decrease back from 2018. On average, over 540,000 users have quit tuning into Pandora and have decided to use something else.

Since SiriusXM acquired the service in Feburary 2019, Pandora has taken things further with one thing that funds a majority of it's royalities, ads. Pandora has been playing about five minutes of ads every hour, which is about 50% of the normal 10 minute ad block on most commercial radio stations, although more recently, some radio stations have offered 2-hour commercial free blocks, along with only 2-4 minutes of ads every hour for select stations. Pandora also has no longer offered the free one hour ad-free experience, instead forcing people to subscribe to either Pandora Plus or Premium, in order to enjoy an ad-free experience.

Because of the many number of ads Pandora is playing, many of it's users have departed the service in search for an alternative. The best alternative to Pandora is Spotify, which currently has 248 million active users (about nearly 4x more compared to Pandora's MAUs) and in comparison with Pandora, Spotify is available in other countries like the United Kingdom, Canada, France and Japan, while Pandora is strictly available only in the US. In addition to that, Spotify has gained 113 million subscribers worldwide, about 45.7% of it's MAUs. In comparision, Pandora only had 6 million subscribers of it's 71.4 million MAUs last year, about 8.4% of it's users. And that number is more than likely to drop this year.

Judging by the number of MAUs for Pandora, if they kept up with the same percentage they had last year, they will have 5.45 million subscribers, a loss of 550,000 subscribers. And along with that, they have lost 540,000 listeners each month, some of which may have been subscribers.

iHeartRadio has also become increasely popular, reporting 128 million monthly active users in 2019, compared to Pandora's 64.9 million MAUs, making iHeartRadio close to being 2x more popular than Pandora. iHeartRadio has been serving 39.7% of the US, while Pandora only serves about 20.1% of the US.

Pandora offers customized radio stations that you build, along with a handful of podcasts (most of which are produced by SiriusXM) while iHeartRadio offers 1,500 live radio stations that are programmed by actual people (not an algorithm) and even more podcasts, a majority of which are not available on Pandora. iHeartRadio became the No. 1 app for Podcasting in 2018, making iHeartRadio the most used podcast platform in the US.

This is a list of the most popular music streaming services in the US, according with their MAUs or paid subscribers:

No 1: iHeartRadio (128 million MAUs) (39.7% market share)
No 2: Pandora (64.9 million MAUs/5.45 million subs) (20.1% market share)
No 3: Spotify (56 million MAUs/26 million subs) (17.3% market share)
No 4: Apple Music (28 million subs) (8.7% market share)

Although the two radio giants have continued to remained popular in the US, Spotify might be able to take the second place throne if Pandora continues it's pace at losing many listeners as Spotify's worldwide MAUs continue to grow. Apple Music has also been a critical sucesss with gaining more subscribers in the US than Spotify, despite the fact that Spotify has more subscribers worldwide than Apple Music. Spotify has 113 million subscribers worldwide, while Apple Music only has 60 million subscribers.

Pandora has also forced adblock users to disable adblocking on the site, instead forcing people to listen with ads, as the same on mobile. Many adblock users have probably departed the service for iHeartRadio or Spotify. iHeartRadio doesn't seem to still not care about adblockers, although Spotify has stated in it's new terms of service that adblock users will have their account terminated at any given time. But Spotify can lure these adblocking users into Spotify Premium, in order to download music offline, play any song on demand rather than listening in a closed-radio shuffle mode on mobile devices, and of course, ad-free music.

By the end of 2020, Spotify is expected to have 310 million MAUs, with 145 million of it's users paying for the service. This is about 46.9% of it's MAUs paying a monthly fee in order to listen on demand on any device, download music offline, and enjoy ad-free music. Although the remaining 53.1% will not actually pay for the service, there has been rumours going around that Spotify will shut down it's free tier and force people instead to pay for the service, similar to that of Apple Music. These rumours had started just when Apple Music launched back in 2015, when Apple had persuaded major record labels like Universal and Warner to take down their catalogue off of Spotify. This led to an investigation by the Department of Justice and European Commission, as this would result in a big loss of users and music for the streaming giant. Then, in August 2017, these rumours floated around yet again, as Digital Music News reported that Spotify and YouTube Music would shut down their free tier services by the end of 2020. In the end, it's very unlikely that Spotify and YouTube will shut down their free tier services as this would result in many more losses of users, forcing people to find an alternative.

Spotify offers six daily mixes, which update every so often depending on the user's listening habits. It also offers a Discover Weekly playlist, along with Release Radar, the first which offers music that the listener might be intrested in, with the latter for new releases that the listener might like. The six daily mixes can be listened to on-demand, even if the person doesn't pay for Premium, which allows it to lure in listeners that would love to listen to what they want, when they want. Although a big majority of Spotify's playlists can only be played on Shuffle, paying for Premium will get rid of this functionality, and many more perks, like offline listening, ad-free music and much more.

Pandora, on the other hand, relies heavily on wifi and mobile data, and to make matters worse, it's free tier only streams at 64 kbit/s. Users who subscribe to Plus or Premium can get maxed out at 192 kbit/s, while Spotify can offer a max of 160 kbit/s audio for free tier users, and a very high quality stream of 320 kbit/s for Premium subscribers, something that Pandora doesn't come close to offering.

Spotify is great for audiophiles, as it offers the most highest quality out there. Pandora is more meant for users that don't seem to give a crap about the quality, although that the ads are encoded at nearly the same bitrate that Spotify uses for it's free tier service, which makes things really unfair for Pandora's listener base.

So what do you think will happen to Pandora? More than likely, at the rate that Pandora has been going, Pandora could have only 56-62 million MAUs by the end of 2020, which means Pandora might die very soon. As many so-called Pandora alternatives like Spotify and iHeartRadio continue to grow, Spotify might be able to become the second most-used streaming music service in the US, as Pandora continues to lose it's fellow listeners. What are your thoughts? Let me know in the comments below.