Pandora Chief Financial Officer Michael Herring left the...

expected after it instituted a listening cap on mobile devices in March, but the company has said in the past that it generates more revenue from the ad-supported part of the business than from its $36 yearly subscription fee (CD May 16 p19). Herring said Pandora has had the same pricing since it launched, while competing services “tend to raise prices over time.” While “that’s not been Pandora’s route to market to date,” he said, the company has “ever-rising costs” and the possibility of a fee increase is something “we look at very closely.” A subscription increase “is definitely on the table,” he said. The listening limit worked as planned, said CEO Joseph Kennedy. Pandora had an uptick in total active listeners and a drop in the number of hours streamed, which enabled the company to manage content acquisition costs with “minimal impact on listenership or revenue growth,” Kennedy said. Pandora added 700,000 subscribers in Q1, more than it added all together in fiscal 2013, Kennedy said. Of Pandora’s more than 2.5 million subscribers, nearly half have been generated on mobile devices, Kennedy said. Monetizing the business from mobile users continues to be a “core focus,” and Kennedy said mobile revenue from ads and subscriptions doubled versus the year-ago quarter. Pandora holds the top listening spot in most local radio markets and its share of total U.S. radio listening in April was 7.33 percent, he said. Kennedy cited a recent report from research firm BIA/Kelsey that predicted a sevenfold jump in mobile local media ad revenue, from $1.2 billion last year to $9.1 billion by 2017. Pandora has beefed up its ad sales staff in 28 of the top 40 local markets “to further capture our share of the relevant advertising budgets,” he said. Of its 248 sales reps, 72 are covering local markets, he said. On the Internet of Things, which Kennedy called the “the next huge wave driving technology innovation and consumer adoption,” Pandora stands to gain through connecting people to music, he said. Efforts such as its recent launch of the Pandora Premieres station, which plays new music up to a week before its official release date, and integration with Facebook -- where users can share the music they're listening to -- are examples of moves in that direction, he said. Q1 revenue at Pandora was $125 million, up 55 percent from the year-ago quarter, and mobile revenue nearly doubled to $83.9 million, the company said. Ad revenue reached $105 million, up 49 percent, and subscription and other revenue doubled to $20.4 million, it said. Pandora reported 4.18 billion total listener hours, a 35 percent bump.