A warning to Apple – online radio is ‘fantastically hard’, says Pandora co-founder | M&M Global

A warning to Apple – online radio is ‘fantastically hard’, says Pandora co-founder

Pandora Radio co-founder Tim Westergren has sounded a warning to newcomers like Apple that its entry to the online radio space will be far from straight-forward.

Tim Westergren interview

Speaking exclusively to M&M Global’s managing director, publishing, Jeremy King, Westergren said the development of its online radio service over the past 15 years has been “fantastically hard”.

Apple launched its Apple Music streaming service last week, alongside Beats 1, a new global radio service under the Beats electronics brand it acquired for $3bn last year.

Pandora has acquired nearly 80 million active listeners in the US, Australia and New Zealand over the past 15 years, and harbours further international ambitions, depending on the creation of an “acceptable licensing structure”.

Earlier this year, the platform recently announced a $48.3m net loss for the first quarter, with listener numbers dropping 2.8% on the previous quarter. However, its active listener levels were up 5.2% on 2014 levels.

“[Services like] Tidal, Apple Music, Spotify are principally focused on on-demand listening. That is very different from us, we’re a radio product. Ours is lean-back listening,” said Westergren.

“Historically those two modes don’t compete, they are complementary. If you hear a band you like on Pandora, you can’t rewind and listen again. Our focus has been to nail this particular experience – it’s fantastically hard to do, and 15 years later we’re still working on it.”

With international expansion still only a “long term” ambition, Westergren’s focus is on improving the commercial prospects in existing markets.

Pandora has invested “under the hood” in advertising technology, including a ‘Sponsored Listening’ product which allows users to choose to hear a brand’s ad in exchange for an hour’s free listening. It has also begun trialling a new mobile programmatic buying service.

“We’ve been investing the last couple of years in infrastructure, a lot of stuff under the hood, which is now beginning to bear fruit. Advertising technology has been a big focus for us, the biggest batch of engineers we have are working on that,” said Westergren.

“With brands, once you know the audience and artist, and you put them together based on affinity and location, it’s the perfect ingredient for a great event for a brand to be part of. We can create these branded experiences that are a win-win situations.”

He added: “The better we’re able to monetise, the more we’ll be able to invest in the business. And, ironically, the better our advertising gets, the less of it we need, which is a benefit to the consumer.”

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