Feeds

Pandora may open its box downunder

Stealing advertising and eroding listeners: report warns

  • alert
  • submit to reddit

Mobile application security vulnerability report

Internet radio outfit Pandora is set to disrupt the Australian radio landscape eroding advertising revenue and asset valuation, according to a new report from Morgan Stanley.

The report suggests that Southern Cross Media (SXL) group, as the largest and most profitable radio business in Australia, has the most to lose from new entrants such as Pandora or local clones but significantly also has the strongest platform from which to launch its own personalized internet radio business and to gain a first mover advantage over new entrants.

“We expect personalized Internet Radio services,such as Pandora, will enter this market at some point over the next 2-3 years," the report states.

Pandora has yet to signal its intention to hit down under but Australia is getting its first wave of digital music streaming upstarts, with the launch of Spotify, the Omnifone backed Rara.com and the music project from the Skype founding crew, Rdio.

"We believe it’s only a matter of time before the internet has a negative impact on traditional radio listenership … and thereafter radio asset values in Australia too,” Morgan Stanley warns.

The report states that as radio accounts for around 60 percent of SXL’s total revenues and TV the other 40 percent, if a new entrant like Pandora were to launch in Australia and capture 2-3 percent of the market within 3 years,“ it would be analogous to the last time the Federal Government auctioned off new FM radio licences, back in year 2000-2003.”

In the wake of the new licences being issued, back then, ASX listed Austereo underperformed for a considerable period as investors tried to quantify the impact on earnings of new licences issued, the analysts point out.

In the US Pandora listeners account for 4-5 percent of all radio listener hours in the US but most significantly is forecast to generate $US364m of advertising revenue in 2012. Morgan Stanley Research forecasts that by 2016, Pandora is forecast to generate $US1.45bn of ad revenue, equating to a 10 percent share of the total US radio market.

Another key factor is that 78 percent of Pandora’s monthly unique visitors are listened from a mobile device, including over 50 percent that listened only from a mobile device, according to Commscore. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.