Pandora loses music streaming top spot in the USA to rival Spotify

By Emmanuel Legrand

 

Pandora is no longer the most popular music streaming service in the US, losing the top spot to Spotify in 2019. At the end of 2019, the American streaming service had 63.1 million listeners, down 8.1% over 2018, compared to Spotify's 65.4m US listeners, up 25.8% year-on-year, according to eMarketer’s latest forecast on digital music listeners. 

 

 

  Amazon Music and Apple Music are distant third and fourth with, respectively, 38.7m and 33.7m listeners. Both platforms have added listeners in 2019, with Apple up 18.5% y-o-y and Amazon up 27%. eMarketer define listeners as internet users of any age who listen to music streaming services on any device at least once per month. 

 

  Pandora and Spotify follow two different trends: Spotify has been on a constant growth path in the US, with users jumping from 45.8m in 2017 to 65.4m in 2019, when Pandora's listeners dropped from 74.5m to 63.1 million during the same period. eMarketer forecasts that Spotify's users' base will continue to grow, reaching 75.9m at the end of 2020 and 93.4m in 2023. Pandora is expected to have 60.8m listeners in 2020 and 57.8m in 2023. 

 

Key business decisions

 

  eMarketer attributes Spotify’s rapid growth "to a few key business decisions" such as the acquisition of several podcast production companies, which provided additional content on the platform. Additionally, Spotify partnered with Google Home Mini, Hulu and Samsung devices, "offering deals that have allowed it to reach more listeners."  

 

  “Thanks to a great user experience and strong discovery features, Spotify has added listeners to its free and premium services a lot quicker than we expected,” said eMarketer forecasting analyst Peter Vahle. “In 2019, Spotify focused on adding and curating podcast content, which was largely successful in driving engagement and appealing to a wider range of listeners.” 

 

  eMarketer analysts forecast that while Pandora will remain the second-largest platform in terms of listeners through 2024, its listener's base will continue to decline throughout that time. Pandora, which is only available in North America, operates a non-interactive free tier, and two paid-for offers, Pandora Plus for $4.99 a month and Pandora Premium at $9.99 a month. 

 

Growing appetite for subs

 

  “In 2019, Pandora saw declines in ad-supported listeners and a slight increase in paid subscribers,” explained Vahle. “This has a big impact since Pandora’s ad-supported audience, which is much larger than Spotify’s, currently makes up a vast majority of its listeners. We continue to see a growing appetite for ad-free music subscriptions, which gives Pandora an opportunity to convert its ad-supported audience to its ad-free services like Pandora Plus and Premium.” 

 

  Regarding Amazon, eMarketer attributes the platform's growth to "the many music streaming options it offers" (ad-supported, Prime Music, Amazon Music Unlimited and Amazon Music HD) as well as the increasing popularity of its Echo smart speakers. In 2020, eMarketer forecasts that Amazon Music will grow by 12.%, reaching 43.3 million listeners. Meanwhile, Apple Music is expected to grow by another 10% to 37.1 million in 2020.