Pandora is essentially bringing the features of its website to users of its apps for Apple and Android mobile devices. The app for iPhones is being released Monday, while an Android version is expected to follow soon. Pandora also said it is releasing a version for Microsoft's Windows Phone 8 early next year. It will allow ad-free listening for a year with the Windows app.
Mobile use of Pandora's streaming service is growing quickly. In the quarter that ended in July, mobile listening nearly doubled from a year earlier and made up more than 75 percent of its 3.3 billion listener hours.
Pandora is the leader in free online radio, where listeners can pick genres or styles of music but not specific songs or albums. It has 175 million registered users, including 58 million who use it in a given month. It claims a 73 percent share of the market for free online radio.
Pandora competes for listeners with services such as Clear Channel's iHeart Radio and has apps on phones, tablets, computers and car stereo systems. Apple is the leading online seller of song and album downloads, while a whole host of paid subscription music services such as Spotify, Rhapsody, Rdio and MOG offer unlimited track selection and playback for a monthly fee of $10.
As a free service, Pandora relies mostly on advertising revenue to make its business work.
Investors of Internet companies that offer free services online have been concerned about their ability to make money from mobile advertising as usage of mobile devices has skyrocketed.
Pandora's mobile ad revenue has been growing almost as quickly as mobile listening, and its revenue from mobile ads was up 86 percent at $59 million in the last quarter, making up over half of the company's total revenues. The company, which is based in Oakland, Calif., is expected to report its third-quarter results in late November.
Other companies are making headway generating money from mobile ads.
Facebook Inc. said this month that 14 percent of its revenue came from mobile ads in the latest quarter, causing its stock price to jump, while Google Inc. said mobile ads were on track to generate $8 billion in revenue for the company this year.
Tom Conrad, Pandora's chief technology officer and executive vice president of product, said the revamp was not purposefully designed to boost mobile ad revenue although the update will see some advertising partners get more involved.
"Our motivation for doing this was to connect people with the music they're discovering in a fundamental way," he said.