GigaOM » Internet radio

Pandora founder: Spotify “not fundamentally competitive” with radio peer

Eliza Kern — Thu, 06 Dec 2012 20:12:48 +0000

Despite recent investor concern over the financial future of Pandora and the company’s lowered expectations for the fourth quarter and fiscal year, founder and Chief Strategy Officer Tim Westergren thinks his company can still compete for music lovers.

Westergren said Thursday that while he respects and admires the product that on-demand music streaming services like Spotify offer, these services are “not fundamentally competitive with radio listening,” emphasizing Pandora’s algorithms and discovery elements as Spotify ramps up the competition.

“Their principal product is on-demand listening,” he said. “If you want to listen to Dark Side of the Moon, they’re great.”

Speaking at the Financial Times conference at Stanford Thursday, Westergren emphasized Pandora’s superior algorithms that predict what music listeners will prefer, contrasting the service with Spotify’s more on-demand streaming service. However, Pandora isn’t the only company that can develop algorithms, and it’s becoming clear that Spotify wants to improve its discovery system to compete. On Thursday morning in New York, Spotify CEO Daniel Elk announced new features on Spotify including algorithmic suggestions and a new Twitter-like music graph that could challenge Pandora’s dominance.

However, Westergren said he doesn’t see Spotify as a competitor, citing a figure that 80 percent of American music listening occurs on traditional radio — in which he includes Pandora — and only 20 percent comes from paid or on-demand music that the listener specifically selects. Westergren put Spotify in the 20 percent category, and dismissed it as being in the same business.

“It’s a lot harder than it looks,” he said on developing the algorithm that suggests songs users will enjoy based on new music and past listening. “And people have tried and failed to compete with us.”

Westergren said if you looked at a graph of Pandora’s growth, you wouldn’t be able to tell when internet music competitors had launched because they had so little impact on the business. Instead, he said traditional radio is who they hope to compete, and critical to that competition will be legislation up for debate that would lower music licensing for internet radio.

“Internet radio has really been suffocated,” Westergren said.

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Spotify may add Pandora-like radio service

Laura Hazard Owen — Thu, 26 Apr 2012 12:35:03 +0000

Spotify is working on a Pandora-like, ad-supported radio service that would launch by the end of the year, Bloomberg reports.

Spotify told Bloomberg it has “no announcements to share at this time,” but:

The new format would be similar to Pandora’s, which operates like radio and is cheaper to operate because royalty rates are lower and set by Congress.

The new service would start by year-end and be supported by advertising, said the people, who weren’t authorized to talk publicly. The company has begun notifying some content partners of its plans, they said.

In the most recent figures released, Spotify said it has 10 million registered users worldwide and three million paying subscribers. Pandora has 150 million registered users.

Spotify already offers a radio feature on its desktop app, but it is not mobile yet.

Bloomberg explains Pandora users “have access to any artist whose music has been published, because the service operates under federal rules. Royalties paid by Pandora and other online radio companies are set by the Copyright Royalty Board, a division of the Library of Congress.” So a radio service would allow Spotify to offer some music it doesn’t have the rights to already, and could also pull needed advertisers to the platform.

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Music fans meet Raditatz, Pandora for your neighborhood

Janko Roettgers — Thu, 19 Jan 2012 16:15:08 +0000

Imagine this: You are driving through your city, and your car stereo is automatically picking up whatever Pandora-like online radio stations people have built on each and every block. Raditaz, a new Pandora competitor that came out of beta on Thursday morning, wants to bring this kind of location feature to online radio. It’s not quite ready to run on your car stereo dashboard yet, but the company’s web, Android and iOS apps already look promising.

Raditaz launched on Thursday with more than 14 million songs, which can be used to build Pandora-like radio stations. The service allows users unlimited skips of songs they don’t like, and at least initially, Raditaz is completely ad-free. The service also allows advanced tagging of stations, so you can build your very own workout stations. Combined with the location feature, others at your gym will be able to find and listen to them as well.

Raditaz founder and CEO Tom Brophy hopes that this kind of information will also help sell ads at premium prices once the company starts to introduce advertising. He told me during a phone conversation on Wednesday that Raditaz also eventually wants to launch a premium offering. But for now, the company is concentrating squarely on growing its user base.

Comparisons to Pandora are inevitable for a noninteractive radio service like Raditaz, but there is another interesting difference between the two services, aside from the location and tagging features: Raditaz was built by a team of just seven people. “We have a completely different operating model,” Brophy said, explaining that the company has outsourced both its music catalog as well as parts of its recommendations engine to a third-party provider. This has made it possible to concentrate on working on the service’s more unique features. “It’s taken a lot of time and effort and thought,” Brophy told me.

So what’s next for Raditaz? The company is about to roll out an update to its iOS app this week, and it will update its Android app next. It is also working on a native iPad app and wants to eventually launch a tablet-optimized experience for Android as well. Devices like Sonos and car stereo implementations are also on the road map, and Raditaz will roll out an upgrade to its recommendations engine within the next 30 days.

Raditaz is based in Connecticut and has raised a total of $3 million from angel investors.

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TuneIn Radio takes its streaming act on the road

Ryan Kim — Tue, 10 Jan 2012 20:01:24 +0000

TuneIn has become a powerhouse in streaming music, helping 30 million of users connect to local radio content via its TuneIn Radio mobile apps. The Palo Alto, CA company is now ramping up efforts to bring its service to a very logical place: cars.

TuneIn announced Tuesday that it is being integrated into Ford’s Sync AppLink platform, which enables users of Ford Sync-enabled vehicles to control apps using voice controls. Users will be able to access TuneIn Radio’s more than 50,000 FM, AM, HD and Internet radio stations, and will be able to conduct voice searches for artists or genres or explore top stations using their location information. The news follows an announcement last week that TuneIn was launching a “car mode” for its Android app, allowing users to use voice commands to conduct searches and find music.

TuneIn is already in use on more than 150 devices such as the Logitech Squeezebox and Sonos’ line of connected speaker. And it’s been integrated into certain BMW and Mini vehicles, but that service was white labeled. Now, the company expects to announce a lot more branded deals with auto companies this year and beyond as it tries to conquer the in-car experience, something Internet radio leader Pandora has got a big head start on.

John Donham, CEO of TuneIn, told me about 100,000 TuneIn Radio users utilize the service through in-car solutions, though many more probably connect to the serivce with in-car Bluetooth. But he said he believes there’s a great opportunity to expand TuneIn’s presence, because about half of radio listening is done in-car. He said TuneIn’s ability to find relevant music and content for users is a big step up over existing radio, which is still one of the most popular ways for people to discover new music.

“There is tons of compelling content on the radio all the time but there hasn’t been a spectacular interface for finding it. We see that as a huge opportunity,” Donham said.

Donham said future deployments of TuneIn in vehicles will be able to integrate with a car’s FM chip to provide local stations, and then seamlessly switch over to streaming radio when a car travels beyond FM broadcasting range. That’s important as users face more data caps that can put a crunch on streaming services.

Donham said despite the belief that 8-tracks, taps and CDs would kill radio, nothing has. And apps like TuneIn Radio show the enduring popularity of the medium.

“The Ford deal is just the beginning for us,” said Donham. “I think a lot of listening will shift to digital. We’re seeing people using digital dashboard rather than their analog dash.”

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Connected world: the consumer technology revolution

Thu, 10 Nov 2011 08:01:08 +0000

Connectivity changes everything. That’s the credo driving just about every corner of our day-to-day lives. As human beings, we are now connected to one another through not just our social networks but also our cars, the books we read, the albums we download and even our own health and wellness habits (to name just a few areas). With that in mind, GigaOM Pro has singled out certain areas in the technology industry where we see this shift to constant connectivity taking place most drastically.

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Pandora CTO: We jailbroke the iPhone, love HTML5

Janko Roettgers — Mon, 26 Sep 2011 16:41:36 +0000

Pandora has seen huge growth from mobile platforms, but its start in mobile was actually a little rocky, revealed the company’s CTO and EVP of Product Tom Conrad at GigaOM’s Mobilize conference on Monday. Conrad said that Pandora used to develop implementations for around 50 different feature phones a few years back, but none of these took off. Then the iPhone came along, and the folks at Pandora were so excited that they ended up jailbreaking an iPhone to get a head-start on developing for the platform.

Pandora ended up shipping their app through the official iTunes app store the day it launched three years ago and has since seen its user base explode from 13 million to over 100 million registered users. Conrad has also since made peace with Android, about which he had previously said that he needed the platform ”like I need a hole in my head,” referring to the confusing state of Android fragmentation. On Monday, Conrad didn’t want to go into the specifics of Android vs. iOS market share amongst Pandora users, but he called Android’s growth “nothing short of remarkable.”

Still, Pandora’s future may not be in apps on either platform, but in HTML5. The company launched a new HTML5-powered website last week, and Conrad said that using HTML5 helped to both dramatically increase the performance of the site as well as implement new social features. Being able to turn features like these around rapidly is one of the big advantages in developing for the web, Conrad said: “The good thing on the web is that you can experiment really, really quickly.” Changes could be pushed out over night, whereas the same could take a month or more with native apps.

That doesn’t mean that Pandora will move away from apps for mobile platforms, even though Conrad said he could envision combining HTML5 and native code into a hybrid kind of app. However, HTML5 will also play a huge role in another big future growth area for the company: Devices that bring Pandora to the TV screen. Conrad called HTML5 a “key enbaler for connected devices,” and aded that he foresees that this kinds of devices as well as solutions to bring Pandora to the car dashboard will have a major impact on Pandora’s audience:

Right now, Conrad explained, 70 percent of Pandora’s listening happens on mobile devices. “In the future, the majority of Pandora listening will happen in the car and on the connected device,” he said.

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Stitcher gets $10M to personalize Internet talk radio

Ryan Kim — Wed, 21 Sep 2011 11:00:49 +0000

Stitcher, the Pandora of Internet talk radio, has raised $10 million as it capitalizes on the opportunity in non-music streaming radio. The San Francisco company raised the money from New Enterprise Associates, which led the round, along with money from existing investors Benchmark Capital, New Atlantic Ventures, and other individual investors, including Ron Conway.

Stitcher, which has raised a total of $20 million, allows users to build personalized talk radio stations drawn from 6,000 different shows that cover news, entertainment, sports, comedy. The service in the last year has quadrupled listening time, more than doubled registered users and is now up to 3.4 million registered users. The company more recently launched on Sonos and the iPad and struck a deal to be included on new Buick cars .

Noah Shanok, CEO of Stitcher, said the company will use the money to improve the product, enhance the platform for content providers and build out a direct ad sales force. Stitcher has been running display ads and is in the process of testing in-stream audio ads similar to what Pandora has run. Shanok said to expect more audio ads later this year as the sales team gets hired.

Shanok said talk radio represents 35 percent of the terrestrial radio market and generates $5 billion in annual advertising revenue. While Pandora and Spotify are exploiting the music side of Internet radio, he said Stitcher has much less competition on the talk side. It’s too early to talk about a Pandora style IPO, said Shanok. But with the way things are going, it could be on the horizon.

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Pound for pound, Pandora ads now worth more than radio

Colleen Taylor — Thu, 25 Aug 2011 23:17:39 +0000

Internet radio company Pandora reported the financial results for its first three months as a public company on Thursday. The Oakland, Calif.–based company confirmed that while it still has a long way to go before it reaches the listener levels of terrestrial radio, its ads are now just as valuable as traditional stations’.

Pandora posted total revenue of $67 million during the second fiscal quarter of the year, more than doubling its revenue from the same period one year ago. Revenue from ads accounted for the lion’s share of Pandora’s Q2 sales, totaling $58.3 million.

And while Pandora did not turn a bottom-line profit for the quarter — the company’s net loss was $1.8 million — it seems to be impressing Wall Street with the traction it has gotten thus far. On a phone call with investors and analysts after the stock market closed on Thursday afternoon, Pandora confirmed that pound for pound its ads are just as valuable as those broadcast on traditional radio.

One analyst said that in reading the company’s quarterly report, he calculated that Pandora is now “generating more ad revenue per 1000 hours than traditional radio is, with a tenth of the user base.” Pandora CEO Joseph Kennedy confirmed that the analyst’s calculations were “broadly correct” but added that it only pertained to the company’s web application, not its mobile apps. “It’s our belief that over the long term we can reach similar levels in mobile,” he said. Pandora saw 1.8 billion total listener hours in the second quarter, across approximately 100 million registered users. For the full year, Pandora expects to make between $270 million and $275 million in total revenue.

During the call, Kennedy also stressed that Pandora is still very small compared to traditional radio broadcasting — and that for investors, that should be a good thing. “We’ve penetrated less than four percent of the U.S. radio market. We simply have tremendous room to grow.”

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Pandora: A journey undertaken for love, not money

Om Malik — Thu, 16 Jun 2011 17:00:58 +0000

Wednesday, nearly eleven years after Tim Westergen and his colleagues started Pandora, it began trading on the public markets. I posted a blog post on the news, and suddenly was overcome by emotion, tearing up a little as I thought about Westergen who has been through hell and back as the founder of this company. His story is no different from any entrepreneur who dares to try to capture lightning in a bottle – but it is one with a happy ending.

There are two ways of looking at Pandora. You could look at through the lens of a life-long skeptical reporter who cannot reconcile the valuation of the company with its business reality — and there are many who are doing exactly that. The other extreme view is to look at it from the point of view of a startup founder, one who has been through his or her own ups and downs. I will let the skeptic take the day off for today. To me, Pandora’s story is about hope.

A Savage Beast

I remember meeting the Pandora team days after my former Red Herring colleague Alex Gove, then at Walden VC, introduced me to Larry Marcus (partner at WaldenVC and an investor in Pandora) and Westergen. The company was at that time called The Savage Beast and was building a music-genome project. Being a reporter who normally focused on the nuts and bolts of the Internet, I didn’t much care for the company, but I liked Westergen.

Over the years, he and I stayed in touch. The boom turned to bust and what was an idealistic quest turned into a journey over burning coals, with constant rejections and a test of faith. He has bobbed, he has weaved, he has pivoted –- and he has survived.

After all these years, and many rounds of funding, Westergen is not making billions of dollars, as many would assume – in fact, he owns a miniscule share of the company: 2.39 percent, which is worth just over $60 million at the closing price of $2.8 billion, a fraction of the money his investors are making. Something isn’t right about that, but that is the way of the world.

Can’t Buy Me Love

I know Westergen and I don’t think he started Savage Beast/Pandora for money anyway. All these years, he has been the same guy. A pair of jeans, a simple t-shirt, plain old sneakers and a bag slung across his shoulders –- and more importantly, an easy smile and willingness to believe that things will get better, if only he could fight for one more day. He did Pandora for one reason: love.

He loved the idea of building a music genome. Eventually the company figured out what the business model would be — and the team there will figure out profits as well. Most startups come from love, not a desire to make pots of money.

These days, it is commonplace to lionize the amount of money a start-up snags from venture-capital investments or billion-dollar valuations some investors place on a company and the insanity of the public markets. Nothing annoys me more than “money” defining one’s convictions. The world unfortunately tends to focus on the destination, not the journey undertaken. And raising money or the public markets are those destinations.

I often joke with my friends that startups are like climbing sheer rock without any support, always slipping a few feet, and then gaining an inch. It is that inch you climb that brings immense joy, even if it is short-lived. The rest is just fighting to stay alive, trying to get ahead and just getting it down.

Rejection shapes us as much as the positive news. Just ask Tim! Or Reid Hoffman! Ask them about how many times venture capitalists rejected their quest for investment dollars. Just because twenty investors reject the idea of a social network for professionals doesn’t mean that it is a bad idea or it is wrong -– it is just an idea that the world doesn’t quite understand yet.

Being a real entrepreneur is a long, lonely road as Tim’s journey tells us. Creating something that is lasting — something you love — takes time. Often a very long time! But in the end, the journey is worth it.

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TuneIn Makes Good Use of Windows Phone 7 FM Radio

Kevin C. Tofel — Tue, 19 Apr 2011 15:01:23 +0000

TuneIn, already available on most smartphone platforms, today launches as a free mobile application for Microsoft Windows Phone 7 handsets. The software streams Internet radio from more than 50,000 AM and FM radio stations over Wi-Fi or a mobile broadband connection. One key difference in the Windows Phone 7 version is that the application integrates with the handset’s internal FM radio to save battery life or listen to local radio programs that could be blocked on the web.

TuneIn is now available on practically all mobile platforms: iOS, BlackBerry, Android, Palm, and even Samsung’s Bada operating system. But among those, Windows Phone 7 is the only smartphone platform that requires an FM radio tuner in handsets. The radio requirement is a “nice to have” feature in my opinion, although some likely couldn’t do without it, and the younger generation wonder how we ever lived before iTunes. It’s clever of TuneIn to leverage the lower-powered radio, so users can shift from Internet to local airwaves and listen longer. And the app can be used exclusively with the integrated FM radio without using up mobile broadband data.

Aside from the new hybrid listening feature specific to Microsoft smartphones, TuneIn offers several key features for all platforms. Search for an artist or song, for example, and the software returns all of the stations currently playing either. A handset’s GPS will find local stations — useful while traveling. Podcasts too are supported by the app, so you can carry around and listen to your favorite mobile technology show.

An app that uses the FM tuner of a smartphone isn’t going to set Windows Phone 7 handsets apart from the pack, or boost handset sales, by any means. However, I do wonder if the FM radio will make a comeback in future phones on other platforms. Internet radio is certainly ubiquitous these days, but as we begin to pay for the data that we use, thanks to tiered data plans, that good ol’ fashioned traditional radio could rise in value.

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