Digital Radio: Pandora vs Spotify

Pandora vs. Spotify – Digital Radio Media Planning

By Staff Writer
In October 2, 2014
2198 Views

How do I choose between Pandora and Spotify? As a consumer, I want to have one for ease of reference and sharing. And I only want one if I decide to pay a monthly fee instead of having commercials (“No, don’t do that,” cries the media planner in me, “Ads are good!”). And as a media buyer, which one do I use if I have a limited budget and need to focus on one digital radio platform for my client?

Well, here are the basics to help you decide.

History/World Coverage

  • Pandora (aka Pandora Radio) is a music streaming service founded in January 2000 in Oakland, California. Right now, it offers services in the United States, Australia and New Zealand. In Alexa rankings of all websites, it comes in at #50 in the US and #258 globally.
  • Spotify is a commercial music streaming service. On computers, there is a link which allows users to purchase selected material with certain partner retailers. In 2008, it was founded in Sweden, but also has headquarters in London, as well as Stockholm. It came to the US in 2011.
    It is worldwide and available in 50 languages. Its Alexa ranking is #582 in the US and #665 globally.

Music Catalog Volume

  • Pandora has 1 million.
  • Spotify has 20 million.

Price

  • Pandora is FREE, but if you want no advertising, the paid subscription is $4.99 per month.
  • Spotify is FREE, but if you want no advertising, the paid subscription is $9.99 per month.

Users/Followers

  • Pandora has 250 million users who spend an average daily time of 4:25 on the site.
  • Spotify has 40 million users who spend an average daily time of 4:10 on the site.

Pros & Cons

Pandora

PRO: The granddaddy of all streaming music services. Research shows that 31% of everyone aged 12+ who listened to some form of digital radio was listening to Pandora. The next highest was iHeartRadio with just 9% (Spotify was 6%). Pandora has more than double the unique users of its nearest competitor. In fact, its 61 million mobile uniques is higher than the total of the next 15 properties combined (which is only 43 million). Edison Research and its “Share of Ear Study, May 2014” notes that Pandora owns 55% share of digital radio with Spotify #2 at 16%.

CON: You can’t get around that it has the smallest library of any of the top ten streaming music services.

Spotify

PRO: One of the fastest-rising players in the field, it houses a much, much larger music catalog than Pandora. (As a side note — Rhapsody has the largest catalog selection with 32 million, but is a pay only service with no free option.) Very easy to make and share your personalized playlists with others.

CON: Although growing, still has a much smaller number of US users. A full 25% of its users are paying a premium to avoid ads. So, for media buyers, their users drop from 40 to 30 million when calculating the available audience base. Plus there has been some bad press and some major artists who complain they are not being paid adequate royalties have actually sued.

The Conclusion

As a consumer, if you really like to create and share many playlists, then Spotify is definitely for you. If you are more of “I just want to pick one artist or song “ and then listen to similar music, then go with Pandora.

As an marketer, I lean toward Pandora because of its CPM affordability and breadth of users from which to target. This doesn’t mean that Spotify should not be on your media plan. However, if it is your first foray into digital radio and your focus is the US, then start with Pandora.

Staff Writer

So who is this mysterious staff writer? Could be anyone really, as long as they meet our very strict criteria. 1) Worked with us in one capacity or another. 2) Have something pretty interesting to say. 3) Want to use our blog to say it. See? Told ya they were strict!