Pandora Media Inc. (NYSE: P) saw its shares trade higher on Tuesday after releasing its media metrics for the month of October 2013. There is just one small problem with this on a subscriber basis and metric of free music online. Pandora’s listener hours are ticking up and its total share of radio is ticking up. Both of those metrics are good, but we see a possible problem developing in that the number of active listeners posted a fairly large decline from the prior month, and this has not been seen before.

Wall Street thinks it is good news that the hours are trending up and market share is trending up, but what does it say if Pandora’s active monthly listeners continues to decline? If you just use logic, then the simplest answer is that Pandora is getting more out of each active user.

It seems almost impossible to think that Pandora could end up in a merger with Sirius XM Radio Inc. (NASDAQ: SIRI). Regulators would block any such effort almost certainly. But Sirius shares have pulled back about 10% from their multiyear highs, as the growth metrics there are starting to show some fatigue after the most recent earnings report. Sirius is worth much more than Pandora, as its market cap is close to $23 billion.

For a comparison, what would happen to Sirius XM’s stock price if there was a drop in total subscribers or active users? Maybe comparing the two is not an apples-to-apples comparison, but we have to consider this. Perhaps this active user concern is more of an issue from Apple Inc. (NASDAQ: AAPL) unveiling a competing iTunes radio. Apple signaled that some 11 million users tried iTunes Radio in the first days after its mid-September launch.

24/7 Wall St. has compared these metrics that Pandora releases each month. Again, total share of radio and total hours is up. Our issue is that the number of active users is on the drop. As the stock trading higher, we are showing the metrics showing sequential gains first. After all, we do not want to seem like mere party poopers when the news is being taken well.

TOTAL LISTENER HOURS TRENDS OF 2013:

• Listener hours for Pandora October 2013 were 1.47 billion, a year-over-year increase of 18% from 1.25 billion.
• For September 2013 they were 1.36 billion, an increase of 18% from 1.15 billion.
• For August 2013 they were 1.35 billion, an increase of 16% from 1.16 billion.
• For July 2013 they were 1.28 billion, an increase of 14% from 1.12 billion.
• For June 2013 they were 1.25 billion, an increase of 17% from 1.08 billion.
• For May 2013 they were 1.35 billion, an increase of 22% from 1.10 billion.
• For April 2013 they were 1.31 billion, an increase of 24% from 1.06 billion.
• For March 2013 they were 1.49 billion, an increase of 40% from 1.07 billion.
• For February 2013 they were 1.38 billion, an increase of 42% from 975 million.

TOTAL MARKET SHARE FIGURES IN 2013:

• Share of total U.S. radio listening for Pandora in October 2013 was 8.06%, a year-over-year increase from 6.61%.
• In September 2013 it was 7.77%, an increase from 6.53%.
• In August 2013 it was 7.46%, an increase from 6.30%.
• In July 2013 it was 7.08%, an increase from 6.13%.
• In June 2013 it was 7.04%, an increase from 5.98%.
• In May 2013 it was 7.29%, an increase from 5.80%.
• In April 2013 it was 7.33%, an increase from 5.95%.
• In March 2013 it was 8.05%, an increase from 5.73%.
• In February 2013 it was 8.48%, an increase from 5.74%.

TOTAL NUMBER OF ACTIVE USERS IN 2013:

• Active listeners were 70.9 million at the end of October 2013, a year-over-year increase of 20% from 59.2 million.
• They were 72.7 million at the end of September 2013, an increase of 25% from 58.3 million.
• They were 72.1 million at the end of August 2013, an increase of 28% from 56.2 million.
• They were 71.2 million at the end of July 2013, an increase of 30% from 54.9 million.
• They were 71.1 million at the end of June 2013, an increase of 30% from 54.5 million.
• They were 70.8 million at the end of May 2013, an increase of 33% from 53.3 million.
• They were 70.1 million at the end of April 2013, an increase of 35% from 51.9 million.
• They were 69.5 million at the end of March 2013, an increase of 36% from 51.2 million.
• They were 67.7 million at the end of February 2013, an increase of 37% from 49 million.

So, the question we would still ask is what happened to the number of active listeners. The growth rate on a year-over-year basis has contracted to 20%. The total number also shows the first real contraction in the number of active monthly listeners. It seems as though the company is turning some of those active listeners into addicts, but what happens if the number of active users keeps declining? Pandora’s market share was shown to be on the rise after Apple’s unveiling of iTunes Radio. We also cannot really blame Sirius XM for the sudden drop in active users because Sirius XM’s growth metrics seemed disappointing if you look at how the stock has performed.

Count on us looking closely here for the metrics in November. If the same trend is seen, Wall Street may not deem it good enough that Pandora is milking more share and more hours from a shrinking group of loyalists.

Pandora shares were up 3.4% to $26.55, against a 52-week trading range of $7.08 to $28.26. Its market cap is currently almost $4.7 billion.

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