Pandora’s love-filled journey to dominance

Tim Westergren, founder and CEO of Pandora (photo taken with my video camera).

And other highlights of NewComm Forum 2010

I‘ve been spending the week at NewComm Forum, the annual gathering of communications, marketing, PR and new media thinkers and doers in San Mateo, Calif. I now have years of distance from the newspaper industry and so am offering my take on where the journalism landscape is heading in an hourlong talk on Friday morning — I’ll post it here next week.

Here’s a recap of some random bits of NewComm that I’ve caught:

Great keynote presentations! Dave Carroll gave a lunchtime talk about United Airlines’ blunders after its baggage handlers damaged his guitar, resulting, of course, in United Breaks Guitars and tons of opportunities for Dave to educate corporations about how to treat customers with respect. After his talk, I pulled Dave aside and got a great video interview, which I’ll post soon.

The highlight for me, so far, was the keynote by Tim Westergren, founder and CEO of Pandora, the streaming media service he founded more than 10 years ago (!) in January 2000 in Oakland. Pandora by the numbers:

• 50 million listeners, with 85,000 new users per day — entirely by word of mouth
• nearly 6 billion thumbs up or thumbs downs (“People love to thumb [up or down] on Pandora!”)
• 85,000 artists — 70 percent of them independent artists (“so the bulk of our catalog is the working musician”)
• It’s on 92 devices.

Pandora is at the forefront of the transition in the radio universe from mass broadcast radio, with one playlist that reaches hundreds of thousands of listeners, to unicast, where you can stream individual stations to each listener over the Internet. “The problem is you can’t have millions of DJs,” which is where the Music Genome Project comes in (the site says: “Moving entertainment from a mass-market service to a one-on-one interactive experience”).

And while “dominance” is probably too strong a word for a company that nearly went out of business three summers ago, Pandora is certainly well positioned now to ride the wave of personalized Internet radio.

Westergren showed off the “analyst scores” that record the musical details of every song — it’s seven pages long! He speculated on using a “genome project” approach to other media — breaking media into its component parts rather than using collaborative filtering (which is based on other people’s likes and dislikes). Television, movies, perhaps. Though I wanted to ask about the feasibility of a books genome project.

Snippets from Westergren:

• “We certainly will add talk, interviews, news” in addition to music some time in the future, though not in the near term.

• “We’re quickly becoming the biggest local radio station.”

• “The average American listens to 20 hours of music a week: 17 hours of radio and three hours of music you own. … So 17 hours a week is going to drift over to this personalized radio” model.

• As Socialmedia.biz reported on in 2007, Pandora came very close to shutting down in the summer of 2007 — indeed, the new rates for royalties would have doomed all of Net radio. Said Westergren: “As a Hail Mary we organized a political campaign — we had 6-7 million listeners at the time — and sent out an email to our mailing list with the name and phone number of their member of Congress” based on each member’s zip code. Congress received 400,000 faxes in three days and nearly 2 million phone calls overall — more than the number of people who called Congress during the Iraq war, he said. “Think about that for a second and get depressed.” In less than a month, a bill co-authored by 150 House members was passed, eventually bringing royalty rates down to a reasonable level.

• On Wednesday Pandora launched a deal with Facebook that should give them prime position to be the music player of choice on the social network (my words, not his).

• New artists can submit music to Pandora online (though no longer by CD). “We have only one criteria for submission: Is it good?”

• A lot of peole wonder why there’s no GooGoo Dolls or Steely Dan or Frank Sinatra station. The 1998 DMCA forbids it. “We’re only allowed to play four songs by the same artist in a three-hour period under the DMCA,” Westergren said.

• The most thumbed-up [popular] song on Pandora is “Walking on the Sun” by Smashmouth.

• Shel Holtz asked an excellent question about hospitals blocking Pandora because the bandwidth use was slowly down the downloading of patients’ Xrays. “Where are their priorities,” Westergren joked. He acknowledged they’ve received similar calls from the Dept. of Defense “because we were clogging up broadband at overseas military bases.” But those are sporadic issues that can be easily solved, he added.

• He closed by suggesting that a new culture of transparency was beginning to lead to a trend of “musicians who are more authentic.” We’ll see.

My one criticism is that Westegren didn’t do a very good job of tying Pandora’s business objectives to a social media strategy. Pandora_radio has 37,389 followers on Twitter, but that’s a far cry from its 5 million listeners.

Related articles by Zemanta

• Pandora Connects Music Service With Facebook (beatcrave.com)
• Inside Pandora’s ‘Music Genome Project’ (blogs.abcnews.com)
• Pandora and Facebook get social music right (news.cnet.com)
• Pandora and Facebook: So Happy Together (wired.com)

JD Lasica, founder of Inside Social Media, is also a fiction author and the co-founder of the cruise discovery engine Cruiseable. See his About page, contact JD or follow him on Twitter.