At least two of us here at Xconomy—Rebecca and myself—are huge fans of Pandora, the Oakland, CA-based streaming music company. My enthusiasm has only grown since July, when Pandora released an iPhone application that, I think many users would agree, is the single most useful and enjoyable third-party app available for the device. (It’s currently #30 on the “Top Free Apps” list at the iTunes App Store, but I think that’s only because everybody has already downloaded it.)
So when I heard that Tim Westergren, Pandora’s founder and chief strategy officer, would be speaking at the Apple Store on Boylston Street in Boston on Monday, I made like any other self-respecting Pandora fanboy and cleared my schedule. The table-full of listeners who joined me to hear Westergren’s talk starting at noon Monday gradually grew to a crowd of perhaps 50 onlookers.
This being the Apple Store, Westergren spent part of his time explaining how the Pandora iPhone app works. But he also gave an interesting look behind the scenes at Pandora, explaining how the company’s musicologists analyze songs, how the company itself survived nearly three years on the edge of extinction, how it monetizes its free streaming service today, and how it dealt with the threat of changes in performance-royalty rates that threatened once again this year to put the company out of business.
In a nutshell, Pandora lets users create personalized, streaming radio “stations” that play tunes by artists they like, along with music from other artists with similar styles. Its system decides what to play based on the “proximity” of one song to every other song in the company’s database, where songs are scored based on hundreds of attributes such as genre, key, tempo, the gender of the lead vocalist, and the timbre of the various instruments. Users can give a thumbs-up or a thumbs-down to every song that’s played; Pandora’s algorithms use this information to adjust the playlist for each station over time.
The iPhone version of Pandora—which wasn’t possible until Apple allowed third-party apps onto the device last summer, and wouldn’t have been practical, in any case, until the broadband iPhone 3G came along—does essentially everything that the Web-based version does. It’s by no means the only mobile version of Pandora—the company has actually built about 60 different versions of its software for various phones sold by Sprint and AT&T, and is also working on a version of the app that will run on RIM Blackberry devices—but the iPhone version is the first one that has really demonstrated the potential of the Pandora service on an untethered device, Westergren says.
“The iPhone has really changed the trajectory of the company,” he says. Since July 11, the day Apple launched the iPhone 3G and the iTunes App Store, 1.8 million iPhone and iPod Touch users have downloaded the Pandora application, and people listening on these devices are now consuming 10 percent of all music streamed by the company, he says. And whereas the company’s peak listening times have traditionally been 9:00 a.m. to 5:00 p.m.—when people are at their desks at work—that period has stretched out by an hour on either side of the work day, as iPhone owners tune into Pandora during their commutes.
(As for Android, the Google-led, open-source phone operating system, Westergren says it’s still “up in the air” whether Pandora will build an app that works on that platform. “We want to see how much it gets adopted first,” he says.)
Westergren shared some hopes for the mobile versions of Pandora that will make owners of commercial broadcast radio stations either shiver or snicker. “Our objective is to completely replace music radio with this,” he says. And that includes listening to music in your car. With a cheap adapter, Westergren notes, it’s easy to stream Pandora music from an iPhone to a car stereo. “I encourage you to try that,” he says. “It’s weird—I hadn’t actually used it in the car until a few months ago, and one day I was driving along and I said, ‘Hey,
