PANDORA KNOCKS NETFLIX OFF THE TOP SPOT

Pandora has kicked Netflix off the top spot in app revenue for Q3 in the U.S., grossing an impressive $80m. The digital giant can thank the addition of its paid tiers, which started with a premium tier in an invite-only format in March before becoming universally available to users in April.
Pandora Premium is the streaming service's on-demand service, retaining the radio-like quality it's known for while integrating the ability for users to seek out specific songs and add them to playlists. The price point is $9.99 a month which is equal to its competitors.

Unlike its rivals, however, Pandora also offers the mid-tier level, Pandora Plus, priced at $4.99 a month, allowing users to skip or repeat more songs and avoid advertising. Since the additions of these tiers Pandora's experienced a 142% growth over last year's Q3 according to data provided by Sensor Tower.

Because Sensor Tower's data details exclusively in-app purchases, it's not a snapshot of Pandora's business as a whole. It's not including the revenue from the free ad-driven tier, but does give the impression that business is booming.

Sensor Tower's data also suggests worldwide consumer spending in non-gaming apps increased from approximately $1.7 billion during Q3 2016 across both Google Play and the iOS App Store, to reach $2.8 billion in Q3 2017, a healthy 57% growth.

With in-app spending on its way up, something like tiered access is a key tool in getting ahead of the competition. The data from Sensor Tower shows Pandora's taken full advantage of this in utilizing multiple price points giving the consumer more options for purchase. This raises the question of whether or not other streameries will adopt a similar approach, and whether or not they need to.

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