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This Is Pandora’s Plan to Make a Comeback Against Spotify and Apple Music

Kevin Kleinman, a trader at Watchhimtrade.com, listens to music on Pandora every morning as he executes trades worth millions of dollars. But he will not bet a dime on the music streaming company.

Once a Wall-Street darling, Pandora Media has struggled as subscribers spend less time on the company’s app, advertising revenue growth declines and investors worry over a management shakeup that saw co-founder Tim Westergren step down as chief executive.

Pandora, the largest streaming music provider in the United States, is still a compelling asset with more than 73 million active monthly users and because its stock is valued cheaply.

But shareholders and analysts say the company needs to immediately invest in a new ad platform to woo local advertisers and stay relevant in the face of stiffer competition from Spotify and Apple Music, which are grabbing listeners and advertisers with their user-friendly interfaces and exclusive contracts with popular artists such as Taylor Swift.

New Chief Executive Officer Roger Lynch admitted on the company’s earnings call last month that advertisers were shying away because its ad platform had gaps that made it hard for advertisers to transact with Pandora, but he did not lay out a detailed plan on how he planned to tackle the problem. He said Pandora will spend more to improve its existing ad platform.

“At the very top level, I think the company has clearly misexecuted,” said William Graves, chief investment officer at Boardman Bay Capital Management, which holds 315,500 shares of the company as of Sept. 30.

Still, Graves says Pandora is a good investment because of its strong cash position, big customer base, and the possibility of expanding its subscriber base outside the United States.

While Lynch may have been evasive on the call last month, a source told Reuters that

Article source: http://fortune.com/2017/12/07/pandora-music-advertising/

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