Were Pandora Media’s May Metrics Really That Bad?

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Pandora Media (NYSE:P) is down 2.5 percent on Wednesday after reporting audience metrics for the month of May that disappointed Wall Street. Over the last several months, Pandora investors have monitored such metrics closely, especially given the rise of Apple’s (NASDAQ:AAPL) iTunes Radio, and clearly didn’t like what they saw.

In May, Pandora reported 77 million active listeners, up from 76 million in April and 70.8 million in May 2013. Therefore, this particular metric looks good and gives the illusion that Pandora is faring well in the face of increased competition from Apple.

However, Pandora also reported that its share of the total U.S. radio listening market fell from 9.28 percent in April to 9.13 percent in May despite having more listeners. These numbers, although not a tremendous decline, are causing investors to become a little worried following the Apple-Beats deal combined with reports that iTunes Radio has already topped 40 million listeners in only a year’s time. Not to mention news of Amazon (NASDAQ:AMZN) launching its own music service for Prime members isn’t helping matters, either.

With that said, investors might naturally ask the question of which metric is most important: active listeners or listening market share. Also, how could the two metrics differentiate?