Pandora Pandemic

Matt Geraghty   May 15, 2009


Is the writing on the wall for traditional and satellite radio? (image via Hyrck)

Pandora. It’s the most downloaded app for the iPhone. There are a whopping 27 million existing listeners. 10,000 new songs are added monthly. They have a growing roster of 70,000 artists. It’s the most popular radio station in virtually every major market across the nation. The average listening time is over 3 hours every day. So what’s Pandora’s secret?

It’s content strategy, of course. Pandora’s robust taxonomy and selective curatorial process are the two major building blocks to their service which now boasts adding 60,000 listeners a day, competing directly with Sirius XM and going head to head with broadcast radio.

Behold the Taxonomy

Begun in 2000, Pandora spent years building the Music Genome Project: a taxonomy-based music categorization platform. By identifying over 400 different characteristics of a piece of music, it categorizes and classifies all musical submissions. Your favorite songs might be tagged as having avant-garde leanings, a driving swing feel, a vamping harmony, a minor key tonality, emotional vocals, an outside piano solo or aggressive drumming. Give it thumbs up or thumbs down and Pandora begins algorithmically analyzing your likes and dislikes, serving you up engaging recommendations of music that have similar musical DNA. Pandora works as a personal music classifier instantly becoming your audio tastemaker. For good or bad.

Sifting Through the Submissions

Pandora has also honed its content curation process and this might be what makes it stand out from other online music services. According to founder Tim Westergren at a recent Town Hall at Razorfish in NYC, “The challenge isn’t [expanding] the size of the catalog, it’s not having the catalog get too big. Only 10% of the music submitted is actually ready for prime time.”

Their team of musicologists sifts through submissions to look for strictly high quality music that they deem worthy of inclusion in Pandora. Each song that makes the cut to be part of the Pandora library is evaluated for its musical characteristics. “We spend up to 30 minutes analyzing a song and assigning its unique descriptive characteristics,” says Westergren. It then lives in Pandora waiting to be served up to online fans.

Beyond the Browser

But will this marriage of musicology, taxonomy, content curation and user feedback aid in the demise of broadcast and satellite radio as we know it? The tide could be turning as Pandora offers an enticing alternative to the ‘pay for content’ model.

“Our goal is to have a billion listeners,” says Westergren. “This will be replacing the hours you spend on satellite radio. In some cases, we want all of your listening hours, whether it is an iPod, broadcast radio, or satellite. We think the most vulnerable is satellite radio right now. It’s tough competing with personalized free radio compared to paying $15 dollars a month. We’re pretty confident about that trade off.”

So how will Westergren increase adoption? It’s hard to say, but now with 1/3 of Pandora’s new listeners signing up every day through their mobile device it’s clear that he is strategizing beyond the browser and striving to integrate his product into users’ daily lives. But Pandora has its shortcomings, too.

Pandora vs. iTunes

Can a piece of art really be objectively judged solely by the sum of its parts? If your tastes are very specific, you will be interested in Pandora until it stops playing what you want—then you might be inclined to skip to the next song. A common pain point users have is the restriction of only 6 skips per hour. This is a minor inconvenience but a necessary limitation built into their current licensing model.

And how can Pandora effectively distinguish between artists who are identified for their original sound and less desirable ones that simply emulate that style? Pandora falls short as well if I want seamless uninterrupted listening on my morning subway commute to the office. The iPod is the logical choice, loaded with my favorite music, already with on-demand access. Will a user base armed with iPods continue to sacrifice control and reliability for free access to Pandora’s library? We’ll stay tuned to find out.

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5 Responses

  1. Sharon says:

    I am a huge Pandora fan. But am I right to think I heard an audio ad in my playlist the other day?

    Has anyone else heard something like this on their stations?

    It could have been that my I-Tunes cross-pollinated the feed. If not, I fear Pandora – which is brilliant, personal and otherwise awesome – may be, er, opening the commercial radio box :)

  2. Matt Geraghty says:

    Pandora is accelerating their audio ad campaigns as part of their monetization model. They are selling 10-15 second spots and from a business standpoint it has been very successful. But naturally they’ve been getting mixed reviews from users. Some realize that they need to run ads to be a viable business but others are still offended with the intrusion.

    Their overall ad model has some unique components. First they are able to offer very specific demographic targeting for those who want to run campaigns based upon the profile information you’ve entered when registering. Secondly, they can couple an audio ad with a visual ad for an even more powerful engagement. Additionally, they are able to serve up ads every time you take an action. Every time you thumb up, skip a song, read a band bio, or open a new station you may be served up a brand new visual ad. With each one of these interactions they know you are looking.

    On average people engage with the site 6-7 times an hour. Think of all the Bose stereo systems, Nike sneakers, Sprint phone plans, Blu-ray Disc Players, and new Dave Matthew CDs you can be persuaded to buy during that time.

  3. Matt Geraghty says:

    Breaking News on Pandora from “Pandora predicts first ever profit next year”

  4. BradleyT says:

    Maybe Pandora is too good?

    I’ve been listening for years and have over 3000 ratings. Most of the time when I need to interact it’s when Pandora asks me if I’m still listening. By now it pretty much never plays something I don’t like and often will play 20 songs in a row that I’ve thumbed up. And the songs it plays that I haven’t thumbed up I usually like but don’t necessarily want to thumb them up and get them into my rotation.

    I guess what I’m trying to say is that it’s so good that it doesn’t require me to interact with it but once every few hours.

  5. Matt G. says:

    Interesting point Bradley. To the extent that you feel you aren’t being challenged as a listener to discover new music, maybe Pandora IS too good. I do think Pandora prides itself on exposing you to new music, so I’m curious what percentage of new artists are being pushed into your stations’ rotation.

    Also today Pandora announced the launch of Pandora One. $36/year subscription based service with better quality audio, no ads and browserless playback option.

    Time to upgrade?

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