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Why Pandora Stock Increased Recently

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Pandora introduced three new capabilities for advertisers

Music streaming service company Pandora (P), which has over 71 million active monthly users, is looking to boost its ad revenues. The company announced three new ad formats for advertisers.

Now, advertisers will have access to dynamic audio, sequential audio, and short-form audio.

Dynamic audio ads can be customized based on a variety of factors like age, gender, location, and genre. Sequential audio ads will let the advertiser tell a story in a sequential order using multiple ads. Short-form audio ads range from four to ten seconds long and complement 15 to 30-second ads.

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Pandora has been investing in its ad-based tier

Pandora has delivered decent results in the last few quarters, which caused the stock to increase more than 80% YTD. However, Pandora only has slightly over six million paid subscribers. In comparison, Apple Music has over 40 million paid subscribers, while Spotify (SPOT) has 83 million paid subscribers.

Paid subscribers bring in more revenues compared to ad-based free users. While Pandora is trying to increase its subscribers, it’s also trying to better monetize its ad-based tier. Recently, the company completed the acquisition of ad-tech company AdsWizz for $145 million.

The stock has risen nearly 10% in the last five trading sessions.

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