Pandora Versus Spotify: Who Will Win The Mobile Music War?

Posted by · May 8, 2012 11:00 am

With over 150 million registered users–more than 100 million of which have accessed Pandora through a smartphone or tablet–Pandora President and CEO Joe Kennedy told attendees at the International CTIA Wireless 2012 conference yesterday that the music discovery service is poised to lead the mobile music space in 2012.

“The continued growth of Pandora shows that personalized radio is fundamentally changing the way people listen to music. Mobile connectivity has allowed us to deliver on our mission of providing people with music they love at a scale that presents unprecedented opportunities for both artists and advertising partners,” Kennedy said.

According to the numbers Kennedy revealed at CTIA 2012, more than 70 percent of Pandora’s listening hours take place on-the-go from mobile phones or other connected devices, and total mobile ad revenue grew from $25 million in FY2011 to more than $100 million in FY2012. As for how this compares to overall listener metrics, the company also revealed those metrics yesterday:

  • Listener hours for Pandora during the month of April 2012 were 1.06 billion, an increase of 87% from 566 million during the same period last year.
  • Share of total U.S. radio listening for Pandora in April 2012 was 5.95%, an increase from 3.11% at the same time last year.
  • Active listeners were 51.9 million at the end of April 2012, an increase of 52% from
    34.0 million during the same time period last year.

I spoke with Pandora’s Chief Marketing Officer Simon Fleming-Wood at CES earlier this year, and he told me that the company’s goal was to get Pandora on every device you could ever want to listen to Internet radio on.  To meet Fleming-Wood’s goal, Pandora has made some impressive strides over the past year to seamlessly integrate its service into people’s everyday lives including partnerships with home appliance companies (you can listen to Pandora from your refrigerator), automotive companies (to date, 48 vehicle models come equipped with Pandora radio) and aftermarket manufacturers.

The one thing Fleming-Wood did not want to talk about at CES? Pandora’s main competitor, Spotify.

Pandora versus Spotify: How do they compare?

With over 18 million tracks in its music library (compared to Pandora’s one million), Spotify has proven to be Pandora’s toughest competition. While Spotify offers users a searchable library of music versus Pandora’s music discovery service (you tell Pandora what type of artists your like and it will play songs from similar artists), it’s rumored that Spotify will launch their own Pandora-esque music discovery system later this year.

The biggest pressure that Pandora should feel is on their marketing efforts.  Spotify has linked up with Facebook’s open graph to allow Facebook users to share what they are listening to on Spotify on their Facebook wall.  While I find that service annoying and decline to share my own music choices, many of my Facebook friends do share their Spotify playlists.  Given the advertising power that Facebook has been reinforcing to the world during their IPO roadshow, it would serve Pandora well to figure out how to leverage Facebook and other social media sites in their marketing efforts.

As a music lover myself, I pay for both Spotify and Pandora and stream both through my mobile phone, home electronic devices and the Bluetooth system in my car.  Both the Spotify and Pandora mobile apps are easy to use (I have an Android device) as are the web-based versions.  I have noticed that Spotify has a more mainstream selection of music available, while Pandora seems to have a larger library of indie artists.  (Then again, that could be my music preferences.) In my opinion, the Pandora versus Spotify decision is not a mutually exclusive one: Sometimes you want to listen to an artist you know you like and sometimes you want to discover artists you haven’t heard of before.

For users, the real choice should be whether or not you’re willing to pay for the service.  The answer to that question is, yes, you should be, by the way.  Both Pandora and Spotify are worth the $36 a year and $120 a year that you pay for them.  After all, musicians need to eat too.

What about you? Which music streaming service do you prefer? Let us know in the comments section below.