Pandora Founder/Chief Strategy Officer Tim Westergren

 
How does Pandora view terrestrial radio?
We have great respect for Broadcast radio and have worked to include the best practices from this longstanding industry into our own service.Lately, our industry has been asking the question “Is Pandora radio?.” How would you answer that?
While there is no doubt that Pandora is indeed a form of radio, we don’t think listeners spend much time thinking about what to call it. Our goal is provide a great listening experience that is personalized, easy to use, full of discovery, and available anytime and anywhere. Connectivity has created an incredible opportunity to offer personalized radio over any device, or devices, that consumers have – in the office, in the home, in the car, or on the go.Recently Clear Channel’s Robert Pittman said Pandora is not radio, because “You need human beings to bond to. You can’t bond to a jukebox.” How do you respond?

We don’t comment on what others say about Pandora.How does Pandora plan to combat terrestrial radio’s localism and how does the company incorporate localism into its advertising?

According to recent data from Edison Research, our Average Quarter Hour – radio’s key audience metric – makes Pandora one of the largest and most listened to radio stations in the top ten key local markets across America. Our local business is growing very rapidly and represents a big opportunity for us going forward. Our advertising solutions can be targeted not just by geography, but also by age, gender, time of day and type of music. Our local clients increasingly include car dealerships, banks, grocers, entertainment venues, real estate offices, and other longtime patrons of traditional local broadcast radio. We recently released a new product that lets people deploy campaigns on the site specific to congressional districts and have already seen great interest from agencies in this capability.You mentioned Pandora’s use of AQH ratings data from Edison Research. Does the company use them the same way radio would with its clients and advertisers?
AQH is how radio buyers view and make their ad buying decisions. Edison has access to our raw data, enabling them to convert our listening hours into AQH so buyers have an accurate apples-to-apples comparison of how Pandora stacks up against other radio stations in terms of reaching their audience. Agencies and clients are increasingly demanding a measurement system that accurately captures where their consumers really are. We are hopeful that Arbitron will recognize this new reality and include us in their ranker system.You also recently spoke about using local targeting to promote concerts as well, another avenue that has been radio’s territory traditionally.

Indeed. As a long time musician, I am particularly excited about the potential this platform holds to support touring musicians.
(Editor’s Note: Pandora announced its “Pandora Presents” concert series this week, using its technology to offer free concert to fans of bands in specific markets.)As streaming and licensing costs continue to increase, how does Pandora plan to combat this? Where does the company see its revenue growth coming from in the near future?
We do indeed pay royalty costs much higher than the terrestrial radio market and some of the highest in digital music. While we are certainly supportive of compensating musicians for the use of their music on radio, the lack of parity in royalty costs across different forms of radio is an issue that needs to get resolved. That will take time. We are seeking to transform an enormous industry, with an addressable market of almost $37 billion in the US alone drawn from mobile, interactive, and traditional radio buckets. With just 4.3 percent of the radio market in the U.S. currently, our growth path is quite clear to us. 

There have been many personalized streaming music services over the years. What has made Pandora the leader in personalized music?
We believe we have the best personalized radio service in the world. Personalized radio may sound simple, but is very, very hard to do well. It has taken us years to develop the underlying technology, including a detailed hand-built musical taxonomy over 11 years in the making. This foundation, now supplemented by an immense amount of listener feedback creates a uniquely powerful product.

What are Pandora’s goals for the next year?
Our goal is to keep making our product better: easier to use, with more discovery, broader features, and more ubiquity. Radio is at a major transition point – moving from broadcast radio to personalized radio – and we are leading that transformation. We are incredibly excited about what the coming years hold for us.