Spotify tests music streaming Stations app in Australia first, Pandora cuts work force and shifts focus

Both Spotify and Pandora are experimenting with different ways in which to reach a wider user base.

In Spotify’s case, it is testing a new free music streaming app called Stations – launching quietly in Australia as the first market for Android users.

Stations is similar to the original Pandora service, based around playlists, and allowing free and premium users to chose from curated music stations.

It seems to be aimed at that huge reservoir of people who don’t stream music because they find the whole process too complicated.

Spotify says, “When you have access to all the music in the world, finding the right thing to play can feel like a challenge.

"With Stations, you can listen immediately, and switching stations is simple and seamless — no searching or typing needed.”

User reviews applaud the app’s simplicity and the way it offers specialised stations once it learns what they like.

But the grumbles are that users can’t create new playlists, there and no way to skip tracks, and you can’t download albums.

Pandora in the meantime is undergoing a transformation to make its operations more feasible in the changing streaming landscape.

This week it announced it is going through a restructure to shrink its work force by 5% (to now total 2,200) to generate annual savings of US$45 million.

At the same time, it will also be hiring new staff in Atlanta, “a region with lower costs than the company’s headquarters” in Oakland, California.

It will use these savings to expand into "ad-tech, non-music content, device integration and marketing technology” and audience development.

It’s possibly testing the waters with a shift from subscription streaming where with 60 million users and 5 million paying subscribers, it is still paying catch up t Spotify’s 70 million subscribers.

Its biggest revenue comes from advertising.

Pandora CEO Roger Lynch, who took over last September, said, "Pandora is the largest music streaming service in the US.

“People spend more time on Pandora than any other digital platform in the country, and as our dynamic industry evolves, we must also evolve.

“These changes allow us to act faster, invest for growth and extend our leadership as the audio market hits what we believe will soon be a major inflection point.

"As I shared last quarter, we know where and how to invest in order to grow.

“We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing.

“I am confident these changes will enable us to drive revenue and listener growth.

In the nine-month period ended September 30, 2017, Pandora had a net loss of $506.5 million on revenue of $1.07 billion.

Pandora will release its Q4 and full-year 2017 earnings on February 21.