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As Apple lets radio roll, Pandora listener growth tones down

Even as the Web's biggest radio provider lifted a 40-hour cap on mobile music, its September metrics showed listener-hour growth slowed from the past couple months.


Pandora's metrics for September, which were released Wednesday, showed the most widely used online radio service is still growing, but growth in listening hours slowed from recent months, as Apple's competing service rolled out about halfway through.

Last month, listener hours for Pandora were still on the rise, measuring at 1.36 billion; however, that was an increase of less than 1 percent from August. In August and July, listener hours had increased 5.5 percent and 2.4 percent from the previous months, respectively.

Pandora's total share of US radio listening was 7.77 percent, up from 7.46 percent in August and 6.3 percent in the same month a year earlier. Active listeners were 72.7 million, a 600,000 increase from the month before.

But, while the number of active Pandora users continues to grow -- 25 percent higher in September than a year earlier -- the company experienced the slowest year-on-year pace for any month in 2013.

The slowing growth in listener hours comes in the first month after Pandora lifted a 40-hour cap on mobile listening. Pandora had hinted at some slowing in a filing with the Securities and Exchange Commission earlier this year. However, it's not entirely bad news for the company. Regulating growth in listener hours can work to Pandora's advantage because it keeps licensing costs in check.

However, the cost benefit of less growth in listening hours is only helpful if Pandora continues to gain more users who could subscribe or be additional targets for advertisers, the company's two main streams of revenue.

Apple released iTunes Radio on September 18 in the US and notched more than 11 million unique listeners in the first five days since its launch on iOS 7 and the desktop iTunes software.

That lightning-fast pace, which would put iTunes Radio on track to surpass Pandora in less than 30 days if it's sustained, underscores Apple's advantage in having more than 500 million iTunes users worldwide.