Survey results indicate a 15% “intent” among non-paying Pandora users to upgrade into the Premium product. Correspondingly, the survey showed a reduction of intent to enter the Pandora Plus mid-feature tier, compared to a previous survey. The suggestion is that when Premium launched, interest shifted from Plus to Premium.
The methodology of the survey was not disclosed in public-facing reports of the study, which was conducted for Piper Jaffray clients.
The upbeat conclusion of the survey led Myers to set a price point for Pandora stock of $18 per share. P stock closed at $11.52 last night (Thursday, March 23).
The 15% “intent” is a very interesting figure, when matched against Pandora’s publicly stated goal of signing up between six- and nine-million Premium users in 2017. Taking the free-listening cohort at 100-million quarterly unique listeners (as described in Pandora’s recent quarterly earnings reports), the Premium service would attract 15-million subscribers this year if the survey “intent” translated to action — roughly twice Pandora’s goal.
Pandora Premium is not yet fully rolled out to all radio service users. Subscribers to Pandora Plus receive six months of Premium as a free test — a smart trial period, in our opinion, designed to get users invested in the value and features of on-demand music.