In an increasingly crowded streaming music space, there’s a “lot of room for many players to grow,” said Pandora Chief Financial Officer Naveen Chopra at a JPMorgan Chase investor conference Thursday. Pandora is looking for its growth from its advertising-supported business where it's investing heavily in technology and in ways to retain listeners and acquire new ones, said Chopra. That’s a departure from recent efforts under previous management to steer business toward the $9.99-per-month Premium model. User and listener hours fell some 5 percent in Q1, less than in previous quarters, and Chopra said the number “churning out” hasn’t changed much over the past 12-18 months. Recapturing previous users is “the cheapest thing to do” as they likely have the same email and app, but the company now plans to spend more to acquire new listeners to “turn around the trajectory” on monthly average users, the CFO said: “We’re definitely in the mode of let’s spend, let’s fail fast, let’s figure out what works, what doesn’t work and then just keep" on going.
After informing Prime customers their annual fee is swelling about 20 percent to $119 (see 1804270056), Amazon plucked a perk from its Whole Foods Market and added it to the Prime benefits package Wednesday. Prime members will get an additional 10 percent off sale items by scanning their Whole Foods app at checkout. Select stores will also carry Amazon devices such as Echo and Fire TV. Target, meanwhile, expanded Restock next-day delivery to bring it to 75 percent of the U.S. population, saying it slashed delivery fees from $4.99 to $2.99 while eliminating them altogether for REDcard customers. “Membership fee? Nope,” the retailer said. Target turned to Google as its engine for ordering by voice.
Adoption of over-the-top video is helping to buoy telecommunications data revenue, leaving pay-TV providers to scramble to compete, said research reports Monday. Worldwide spending on telecom and pay-TV services reached $1.66 trillion last year, up 1.4 percent year over year, IDC reported, after forecast growth of 1.6 percent. Over the five-year forecast period ending in 2022, IDC projects a 1.1 percent compound annual growth rate (CAGR).
TiVo, whose stock reached a 52-week low Friday, is exiting the box-building business, said CEO Enrique Rodriguez on the company’s Q1 earnings call Thursday. Shares closed 1.2 percent lower Friday at $13.85. TiVo inked a deal with a “major device manufacturer as our direct-to-consumer box partner” that will take over retail sales, outside of TiVo.com, through Amazon and Best Buy, Rodriguez said. TiVo will continue to sell direct through its own website, fulfilling products through the box manufacturer, he said. Due to the “broad range of potential outcomes for the company,” Chief Financial Officer Peter Halt didn’t provide financial estimates for fiscal 2018. Overall Q1 revenue dropped 7.9 percent to $189.9 million over the year-ago quarter, said the company, driven by declines in legacy TiVo IP licenses, hardware and other products. The operating loss widened to $9 million from $5.3 million. TiVo’s Experience 4 upgrade app, delivered to the retail market in Q4, will become broadly available for MVPDs this quarter, said Rodriguez. The company believes Experience 4’s video discovery capability will be a catalyst for conversions from legacy Rovi guides to the TiVo platform, he said. On consumer electronics, the chief said the company is now focused on IP licensing.
Roku is unfazed with Best Buy phasing out Roku support on Insignia-branded smart TVs under an exclusive partnership with Amazon last month (see 1804180027), said Roku CEO Anthony Wood on a Wednesday earnings call. Roku shares tumbled 12 percent the day of the announcement. Roku is “deepening” its relationship with advertisers and content publishers, said Wood. “The $70 billion spent each year on TV advertising in the U.S. continues to shift to streaming as advertisers follow viewers.” This is the first spring the company is participating in the TV “upfront” season, "indicative of the fact that national advertisers are starting to think holistically about how to reach consumers in the living room and recognize that a larger and larger portion of their viewers are now only available” on over-the-top services, he said.
Pandora shares, battered for more than a year as the company underwent management shakeups and a strategic see-saw, rebounded Friday, jumping 19.8 percent to $6.89. Pandora’s Q1 revenue grew 12 percent to $319.2 million, excluding discontinued operations (Australia, New Zealand and Ticketfly). First-quarter revenue beat expectations and guidance; the company posted $214.6 million in advertising revenue and $104.7 million in subscription revenue in the quarter.
If the latest statistics on slowing smartphone sales weren’t enough, LG underscored the demise of the two- to three-year smartphone life cycle Tuesday with worldwide introduction of its latest flagship handset, the G7 ThinQ. IDC reported Wednesday that smartphone vendors shipped 334.3 million units in Q1, a 2.9 percent drop from the year-ago quarter, fueled by declines in the China market to sub-100-million shipment volumes, a level not seen since Q3 2013.
Amazon shares hit a 52-week high Friday before settling to 3.6 percent higher at $1,572.62, after its Thursday after-market report of a 43 percent Q1 sales surge. The $51 billion in Q1 revenue was 2.5 percent above consensus. Profit was $1.6 billion vs $724 million in the year-ago quarter. Justifying a 20 percent annual price to $119 hike for Prime subscriptions on a Thursday-evening earnings call, Chief Financial Officer Brian Olsavsky said the company continues to raise the value of the Prime program with expanded free same-day and one-day shipping; and two-day free shipping is available on more than 100 million items, up from 20 million in 2014.
Facebook shares rebounded 9 percent Thursday to $175.20 after its Q1 earnings report showed revenue soared 49 percent year over year to $11.9 billion. The company’s $12 billion revenue was “well ahead of expectations driven by broad-based growth across products and regions,” Wedbush Securities analyst Michael Pachter emailed investors Tuesday. Facebook’s 2.19 billion total monthly average users was higher than Wedbush estimates of 2.18 billion, and the company’s daily average user count of 1.49 billion beat estimates of 1.44 billion, said Pachter.
More video streaming and film content, along with smartphones and set-top boxes use Dolby, executives said after fiscal Q2 results. Revenue rose to $301.4 million from $267.5 million in the year-ago quarter and net income rose to $70.6 million vs. $50.6 million, but it expects higher operating costs for the year, as high as $749 million, on unfavorable exchange rates in non-U.S. operations, said Chief Financial Officer Lewis Chew. BT and Sky Sports have been delivering live sports in Dolby Atmos, and Comcast and DirecTV delivered portions of the Winter Olympics in the immersive sound format, said CEO Kevin Yeaman.