NEW YORK ( TheStreet) - The digital music age is just getting started, and Pandora's (P - Get Report) CEO Joe Kennedy has described his long-term plan to challenge Sirius XM (SIRI - Get Report) and also boost his firm's mobile business.
Kennedy said that while desktop-based Internet radio revenue has increased, the real growth for the company is in mobile. "The mobile advertising market is poised to grow from $1 billion in 2010 to $20 billion in 2015," he explained, during an interview.
Kennedy noted that the company makes 6 cents per listener hour on desktop, up from 2 cents, and the long-term business model is better now than it was at the time of the company's IPO, back in the summer of 2011. Currently, the company pays 2 cents per listener hour from mobile in content acquisition costs.
Despite the arrival of start-ups such as Spotify in the Internet radio space, Kennedy does not see real competition. Pandora's Music Genome Project patent separates the company from its competitors, he said and its two patents related to the project do not expire for more than a decade. "Pandora is all about being the best personalized radio experience in the world. Spotify is the modern day equivalent of leasing a record store," Kennedy said.When asked about the company's expansion plans to better compete with companies such as Sirius XM, Kennedy noted that Pandora launched its first comedy channel last year. "We see spoken word as a long-term opportunity," Kennedy noted, but also said Pandora has no immediate plans to expand outside of music. Pandora recently reported fourth-quarter earnings that came in well below analysts' estimates. Pandora lost 3 cents per share on revenue of $81.3 million for the three months ended in January. Analysts polled by Thomson Reuters were looking for a loss of 2 cents a share on revenue of $83.1 million in the quarter. First-quarter guidance was also weaker than Wall Street's expectation. The company sees revenue of $72 million to $75 million for the first quarter. Analysts had been expecting sales of approximately $86 million. Pandora shares are lower by 3.48% to $11.10 on Monday. Interested in more on Pandora? See TheStreet Ratings' report card for this stock. Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices. -- Written by Chris Ciaccia in New York >To follow the writer on Twitter, go to http://twitter.com/commodity_bull. >To submit a news tip, send an email to: firstname.lastname@example.org