Mike Herring, CFO of Pandora Media Inc. (P), said new management hires would strengthen the company’s strategies going forward. He was speaking at the Canaccord Genuity 34th Annual Growth Conference at the Intercontinental Hotel in Boston, Massachusetts.
Pandora (P) is a streaming service that provides music and comedy programming through Internet connected devices. The company offers personalized stations with the input of a single “seed” – a favorite artist, song or genre from the company’s more than one million available tracks. The company has over 70 million active listeners, Herring said, while 250 million have registered accounts.
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“The phase we’re going in from the management perspective is setting ourselves up for the next phase of growth in the business.” Herring pointed to the recent hiring of David Gerbitz, formerly of Yahoo!, as the Pandora EVP of Revenue Operations as an example of what he meant. “He has lots of experience in scaling large. It was important for Pandora to have that kind of expertise in a senior role as we look to optimize the way we sell advertising across multiple platforms.”
Herring said potential international expansion of the service is “a lot harder than people think. Our mission statement is to be a global service. We would like to think it’s inevitable. (But) there are more than a few things we need to accomplish to get there.” Herring said the licenses available internationally are not “attractive from a financial standpoint. We only want to go international to build a meaningful, profitable business. Otherwise, it’s a waste of time.”
The company had added programming since Q4 of 2013, and said that the advertising focus will be on increasing local advertising. The company will be focused on growing users (“we’ve grown organically to date,” Herring said) and will be spending more money in the brand market to do so.
Herring said the company is “at $43 in RPM per 1000 hours, with 10%-15% in gross margin. “That gross profitability is the key metric in understanding the gross profitability in Pandora,” Herring said.
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