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Inside Pandora's Box
Fast-growing Web-based music recommendation engine helps users discover music with the same sonic genes as songs they love.
Tim Westergren, like most struggling musicians, spent many a road trip trekking from gig to gig with his bandmates, hoping to connect with the right set of ears that would lead to a record deal.
Pandora's Tim Westergren
But starting this week from the South by Southwest (SXSW) festival in Austin, Texas, Westergren is embarking on a whole different sort of road trip.
The 40-year-old exec is setting off on a city-to-city tour of the American South in search of new, old, and mostly undiscovered and unrecognized music to add to Pandora, the fast-growing online music recommendation engine he founded.
The goal is to connect with as many record store owners, concert bookers, bands, and music buffs in each city and fill up a huge black chest--call it, well, Pandora's Box--with CDs from unheard artists.
Those CDs will then be whittled down by Pandora's sonic experts, most of whom have a four-year education in music, and put through the Music Genome Project, an intensive analysis of each song that Westergren cocreated in 2000 and which serves as the backbone for the recommendation engine.
The reason for the trip is simple, Westergren says. After many arduous, financially strapped years after the dot-com bubble burst, Pandora is now one of the darlings of the music business and its execs can focus on making it better--instead of just keeping it alive.
"[As a struggling musician], I had firsthand experience of being a needle in a haystack full of music," he said. "Getting visibility as an artist and being able to find new music that you like as a fan are both tough tasks. That's what this trip is about--finding more music to expose our users to."
Pandora is by no means indie-centric. It's chock full of major-label content, and Westergren acknowledges that major labels spend enough money on marketing their artists that they go through their own vetting process that is worth respecting.
Pandora's regular staff jam sessions
"Our users want that major-label stuff, of course, but we will always focus the company on exposing our users to as many unknown artists as possible," he said. "We really proactively search for indie music. To do that, we have to keep looking for new music we haven't heard before."
After speaking on a panel at SXSW's interactive conference tomorrow, Westergren will jump in a van--with empty chest in tow--and head to cities all over the south, including San Antonio, Houston, Dallas, New Orleans, Nashville, Memphis, and Atlanta. He'll be keeping a blog along the way, hoping to set up music-centric events that give him a taste of the local music scene of a particular city.
Artists whose CD makes it into the chest and through the analysis process will quite likely see a spike in their fan base. Although Pandora execs are mum on user statistics, they will say that more than 13 million stations--that is, the recommendation-based audio streams that users create and return to each time they revisit Pandora--have been created since the free version of Pandora launched last November.
That number will likely grow as the company gets Pandora onto more platforms than just the Web. Pandora is now available on Slim Devices' Squeezebox 3, a small component that allows a user to play music stored on a computer through a home stereo system. Squeezebox owners can now use Pandora through their home stereo, and deals with mobile providers and other component manufacturers are likely next.
"We are blessed by having lots of opportunities in front of us right now," said CEO Joe Kennedy, who is credited with moving the company in 2004 from being a back-end recommendation engine for other music stores to going straight to consumers on the Web.
Slim Devices' Squeezebox 3
In a business that is eternally searching for buzz, Pandora has it. Westergren admits that after Pandora first launched in November 2004, the company was completely caught off-guard by its success. Blog posts from early adopters created the viral marketing buzz that companies crave, he said.
"Our user base just started to explode, and we were really caught kind of flat-footed by that growth," he said. "In November and December, it was like a fire drill in here every day just trying to keep the product running."
Pandora's Web interface takes a page from the Apple iPod/iTunes playbook, keeping it stripped-down and simple.
A user starts Pandora by going to Pandora.com, typing in an artist/song they like, and Pandora gets to work, creating a "station" for the user and streaming full playback of songs with similar qualities as the first entry. The user can give a thumbs-up or thumbs-down to each song, further conditioning the engine to the user's sonic tastes.
"The most important thing for us is that the balance between making Pandora a lean-forward, active experience and making it a lean-back, passive one is determined by the consumer," Kennedy said. "We give the user great options for that 'wow' moment of discovering new music."
Pandora doesn't always get it right, of course, occasionally recommending a song that emits a "What the..." from a user.
Westergren acknowledges the imperfection, but says it's a better system than "collaborative filtering, the "people who bought this also liked this system employed by the likes of iTunes and Amazon.
"There are times when we just don't have the right details for certain songs," he said.
Others complain about the quality of the new, previously unheard music the company devotes itself to unearthing.
User Steve Forman recently posted on the company's Web site that "Pandora's overall problem is still that many of the songs just aren't very good. Jaws was a great movie, but I don't want to see Jaws 4 or Piranha, no matter similar they are."
The company has yet to turn a profit, but makes the lion's share of its revenue from ads on the site, most of which come from Apple's iTunes. It also gives users links to buy music they like on stores like iTunes and Amazon, and collects click-through fees for each referral. Pandora's other revenue stream is its ad-free service, for which users pay $3 per month.
Pandora has about 55 employees, most of whom are musicians who serve as music analysts, but doesn't plan on growing hastily to accommodate the growth in users. The focus for most of this year will be adding new music to Pandora and getting it in front of as many new people on as many new platforms as possible.
"There's not a lot for us to spend money on," Westergren said.
With loads of CDs coming in every day from major labels, independent labels, and fledgling bands hoping to get into the Pandora system, it's a long way from the days when Westergren's team of music experts were volunteering their time and just trying to keep the product alive.
"It was pretty hairy for a while," he said.
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