Despite listener hours drop, subscribers up just 290k - has Pandora steadied the ship?

Music streaming service Pandora still has its share of challenges. But its executives believe the company has steadied the ship citing on the last quarter of 2017 and looking at a strong 2018.

In the quarter ending December 31, revenues exceeded forecast, with a 63% rise in subscription revenue ($97.7 million) offsetting a 5% year-on-year decline in ad revenue.

The amount of subscribers to Pandora Plus and Premium grew an additional 290,000 to 5.48 million in Q4, up 25% year-over-year, but just 5.6% for the last quarter.

Ad revenue was $297.7 million in the fourth quarter of 2017, down from $313.3 million in the same quarter the year.

Active users were down 6% year-over-year, totalling 74.7 million on December 31, 2017.

Listening hours continue to drop, to 5.03 billion. In comparison it was 5.15 billion hours last in Q3 2017 and 5.38 billion for Q4 2016.

Pandora pointed out that Q4 revenue excluded Australia and New Zealand, where it closed services in July 2017, and Ticketfly which it sold to Eventbrite in September.

Predicting growth in 2018, CEO Roger Lynch said; “Digital audio is on the verge of massive growth – music consumption is increasing, podcasts are gaining popularity and voice-activated devices are quickly becoming mainstream.

“Just like video, audio is transitioning from a one-to-many broadcast experience to a one-to-one model with personalization at the core.

“Pandora’s scale, listener engagement and data position us well to capitalize on these trends.

“From launching on-demand for our ad-supported listeners to expanding multiple device partnerships in the last quarter alone, we’re building a strong foundation for audience growth and improved monetization.

“These efforts will enable us to strengthen business fundamentals and reinvigorate Pandora in 2018.”

Last month, Pandora announced an organizational restructuring that included layoffs in some departments as part of a $45 million in cost cutting "designed to prioritize its strategic growth initiatives and optimize overall business performance."