The U.S.-based Internet radio service Pandora reported that its GAAP (generally accepted accounting principles) revenue was up 55 percent (to US $157.4 million) in the second quarter compared to the same period a year earlier, thanks to a strong performance in mobile. Non-GAAP total mobile revenue grew by 92 percent, to US $116 million. Total listening hours reached 3.3 billion in the quarter, up by 18 percent from 2.88 billion hours last year. The company’s net loss widened to US $7.79 million, versus US $5.42 million a year earlier.

Tarifica’s Take

Internet-based music consumption, especially via mobile, continues to grow dramatically, as this report attests. Whether or not Pandora can make a financial success of it (note the growing net loss despite the increasing revenue), we believe that mobile network operators can benefit from this trend if they play their cards right. Partnering with existing music-providing entities to create promotions or special packages for mobile subscribers is one way; developing proprietary tailored music apps is another. Either way, music via smartphone could be a good money-maker for MNOs if they find the right equation for keeping the costs low enough.