Tag Archives: googl

Pandora Posts Q4 Earnings Miss As Listener Base Tumbles

Pandora Media ( P ) reported a fourth-quarter earnings miss after the close on Thursday as its active listener base fell, and as acquisition costs and other expenditures took a toll. Pandora stock dropped about 4% after hours. It had set a record low Wednesday but surged more than 8% during the trading day Thursday after a report that the company is in discussions about a sale. The streaming music leader is in a heated battle with rivals, including Apple ( AAPL ), Spotify, iHeartRadio, Amazon.com ( AMZN ) and Google owner Alphabet ( GOOGL ). “Building a business like we have is very difficult and we now have a huge lead and advantage that is incredibly challenging for new entrants to overcome. We are leading the disruption of a $17 billion radio advertising market,” said Pandora CEO Brian McAndrews on the call with analysts. “It is a generational opportunity to drive the future of music for years, if not decades, to come. We are confidently making the decision to invest now to fully capture that opportunity, which is why we are comfortable being temporarily EBITDA(earnings before interest, taxes, depreciation and amortization)-negative.” In October, Pandora bought Ticketfly for $450 million, vaulting the online music-streaming leader into the live-event and ticket-sales business in its bid to take on its rivals — the likes of Apple Music, Google Play Music and Amazon Prime Music. Pandora got final approval to buy Web-streaming service Rdio in December for $75 million. Through several agreements reached the past two years, Pandora is now aligned with music superstars including Justin Bieber, Lady Gaga, Taylor Swift and Adele. The company has inked deals with labels including Sony/ATV, Warner/Chappell, Universal Music Publishing Group, Songs, Atlas and Downtown Music Publishing. In December, Pandora announced multiyear licensing deals with ASCAP and BMI, two major trade groups that between them own the music publishing rights to 20 million songs. Pandora Listeners Decline Pandora has registered an all-time high of 10% share of U.S. radio listening, McAndrews said on the call. But the company also said its user numbers fell during the quarter. Pandora reported 81.1 million active listeners in Q4, down from the 81.5 million active listeners that the service posted in Q4 2014. In December, the online music company got a price target cut from Macquarie, which cited rising royalties and other costs for the Oakland, Calif-based company. “New royalty assumptions and increased costs bring our estimates lower,” wrote Macquarie analyst Amy Yong in a research note, in which she cut Pandora’s price target to 17 from 19. “Pandora has inked multiyear agreements with major labels in the U.S. covering 60% market share of all publishers. We estimate total content costs of $765 million in 2016, stepping up 10% per annum through 2020.” Earlier on Thursday, a New York Times report said that Pandora had held discussions about selling the company . After the news, Pandora stock shot up. According to the New York Times, Pandora is working with Morgan Stanley to meet with potential buyers. Pandora closed at 9.09 on Thursday, up 8.2%, but is down 53% since mid-October as Wall Street frets about how Pandora is withstanding growing industry competition and sluggish user growth. The company said 30% of revenue went to sales and marketing efforts in Q4 2015 vs. 26% in Q4 2014. Pandora now carries a market value of $1.9 billion, down from more than $7 billion two years ago. In December, the online music company got a price target cut from Macquarie, which cited rising royalties and other costs for the Oakland, Calif-based company. “New royalty assumptions and increased costs bring our estimates lower,” wrote Macquarie analyst Amy Yong in a research note, in which she cut Pandora’s price target to 17 from 19. “Pandora has inked multiyear agreements with major labels in the U.S. covering 60% market share of all publishers. We estimate total content costs of $765 million in 2016, stepping up 10% per annum through 2020.” The leading online music company posted a 9 cent per-share loss, swinging from an EPS ex items profit of 6 cents in Q4 2014. Analysts polled by Thomson Reuters had been expecting EPS ex items of 7 cents. Pandora reported Q4 revenue rose 25% year over year to $336.2 million, beating consensus estimates for $331.17 million. For Q1, Pandora guided revenue of $280 million to $290 million, up 6% year over year at the midpoint. The company guided an adjusted EBITDA loss of $65 million to $75 million. That compares to adjusted EBITDA of $43.8 million in Q4 2014 and $24.8 million in Q4 2015. “We enter 2016 with an enhanced portfolio of assets, cost certainty and substantial competitive advantages. We’re invested in the long-term and I could not have more conviction about the ability of Pandora to lead the future of music,” McAndrews said. Pandora stock has sagged since the June launch of Apple Music — a service combining paid subscription music streaming with a 24/7 live global Internet radio station. While Pandora remains the Internet streaming leader, its market share is falling as competition grows.

The Future Of VR As Told By Oculus, Google, PlayStation Execs

Loading the player… At this week’s Vision Summit for virtual reality and augmented reality in Hollywood, executives from Facebook ( FB )-owned Oculus, Alphabet ( GOOGL )-owned Google and Sony ( SNE )-owned PlayStation shared their insights about the future of VR. Oculus founder Palmer Luckey said that both hardware and software developers need to be successful for VR to be prosperous, with two key measures of success being dollars spent on content and hours spent playing content. Oculus Headset and Rift-ready PC bundles will go on presale next Tuesday, starting at $1,499. Oculus is offering the bundles at a discounted rate to get more gear out there. Google’s VP of VR, Clay Bavor, pressed the point that the Internet giant’s goal is “VR for everyone.” He said that some 5 million of the cheap Google Cardboard viewers — which use smartphones to show VR content — had shipped as of the end of 2015, with 30 million Google Play Store app downloads. He said that there’s “similar momentum” on Apple ( AAPL ) iOS. Google is also working in the augmented reality space with its Project Tango, which enables mobile devices “to navigate the physical world similar to how we do as humans.” Sony is one of the companies working with NASA on robot control and space exploration demos. Microsoft ’s ( MSFT ) HoloLens is also said to have space applications. Dr. Richard Marks, the director of PlayStation Magic Lab, said that Sony’s VR platform will have the capability to be used with other entertainment content besides games, including movies, painting, sculpting and potentially even live concerts.

Facebook Tries To Quell Twitter Firestorm Over India

Facebook ( FB ) founder Mark Zuckerberg found himself in the awkward position of responding to tweets by company board member Marc Andreessen about India that Andreessen later deleted, with apologies to an upset audience. “I want to respond to Marc Andreessen’s comments about India yesterday,” Zuckerberg wrote on his Facebook page . “I found the comments deeply upsetting, and they do not represent the way Facebook or I think at all.” Andreessen, a high-profile Silicon Valley venture capitalist and active user of Twitter ( TWTR ), apologized Wednesday for tweets that attacked the Indian government for banning Facebook’s free Internet service in that country and referred to India’s past colonial rule. On Monday, India’s Telecom Regulatory Authority ruled that Facebook’s Free Basics and other similar services are illegal for various reasons. Entrepreneurs in India had criticized the service, saying it positioned Facebook as a gatekeeper to the Web and fearing being left at a competitive disadvantage. The Free Basics service provides free but limited Internet service on mobile devices. The service is available to about 1 billion people across Asia, Africa and Latin America, designed to “bring more people online and help improve their lives,” Facebook says. It’s part of Facebook’s Internet.org initiative that, according to Zuckerberg, has provided Internet access to 19 million people in 38 countries. The decision by India to block Free Basics sent Andreessen into a tizzy. “Denying world’s poorest free partial Internet connectivity when today they have none, for ideological reasons, strikes me as morally wrong,” he tweeted. He added, “Anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?” Zuckerberg Response Gentler Twitter users blasted Andreessen for the comments, which he deleted. “I apologize for any offense my comment caused, and withdraw it in full and without reservation,” Andreessen wrote. “I will leave all future commentary on all of these topics to people with more knowledge and experience than me.” On Monday, Zuckerberg had responded to India’s ban, but in a gentler way. “While we’re disappointed with today’s decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world,” he wrote on a Facebook post. “Connecting India is an important goal we won’t give up on, because more than a billion people in India don’t have access to the internet.” Facebook is not alone in trying to expand Internet access to poor regions of the world. Alphabet ( GOOGL ) is the founder of Project Loon , a research and development project with a goal to bring Internet access to rural and remote areas using a global network of high-altitude balloons. Alphabet plans to create a network of balloons traveling on the edge of space, designed to connect people all over. Facebook’s Internet.org, in addition to working with regional mobile-service providers, is also researching the use of unmanned aircraft for providing Internet access.