Pandora meetup in Minneapolis with founder Tim Westergren

Tim Westergren was in Minneapolis Thursday, July 26th, to talk about Pandora, the company he founded in 1999. Tim is originally from Excelsior, MN which is a suburb of Minneapolis–a good piece of local trivia. Pandora is an internet radio service growing in popularity, recommending music in innovative ways, and attracting droves of fans from around the world (though recently Pandora was forced to disable service outside the US to the chagrin of Pandora and its happy non-US users). Visitors to this website might have seen a roundup article discussing Pandora, Last.fm, and Yahoo! Music services. Of the services, Pandora is the one that caught, and has held (difficult to do with most web applications) my attention. The meetup was held at The Cedar Cultural Center and lasted about 2 hours. Free Pandora t-shirts and hats were offered to each of the 60 or so attendees.

Facets of the Pandora discussion

Tim discussed advertising, the Music Genome project, his Sprint mobile phone, how artists are paid, how music is categorized, Save Net Radio, and much more. Most of the questions and comments from the audience were about the music analysis and categorization process. Tim received a surprising amount of “thank yous” from enthusiastic Pandora listeners, which often preceded their question or comment. Many types of Pandora users were represented in the audience–someone from the music broadcasting industry, those who discovered the service through their Sonos digital music hardware, computer programmers/geeks (like myself) interested in the software/architecture/user interface, as well as casual Pandora users and hardcore music fans.

Tim is an intelligent and laid-back entrepreneur. He established a great conversational rapport with the audience early on. I was also impressed with the questions from the audience, nearly all of them were truly useful/timely or otherwise interesting to ask during our limited time with Tim. I’m tagging this article as an Interview even though I wasn’t interviewing Tim one on one. The audience asked him a lot of questions, and he had a good answer for almost every question.

Facts and figures

Tim shared many interesting figures about the growth and success of Pandora, many getting “oohs” and “aahs” from the audience as they were surprised about some aspect of the figure or its societal implications (such as unsigned music artists, or locale-specific artists/concerts). Pandora currently has about 8 million registered users and Tim said about half of their registered users are “regular users” of the service. The average Pandora session is about 3 hours, lots of time to show textual ads, and lots of time to collect thumb feedback. Users can “thumb up,” thumb down, or rate songs “Zzz,” which is a request that the song not be played for a month. Tim said all advertising for Pandora itself has been done by word of mouth, mostly via blogs, of which there are 70,000 discussing, evangelizing, and advertising Pandora. Pandora is growing by about 15,000 new users per day. Pandora has around a billion pieces of thumb feedback, which is given on average about 8-9 times per hour. Pandora employs about 100 people. Most of the software/product development sounds like it takes place in Oakland, CA, with a few remote people, then advertising offices are in various cities around the world. One University of Minnesota computer science graduate student asked about research opportunities with the Pandora data, and Tim responded that those opportunities exist.

Pandora streams at 128k, servers are collocated, the user interface is flash-based (excluding devices like the iPhone that do not support Flash), though Java-based applications were created for Sprint mobile phones. Streaming that much content to millions of users requires a lot of bandwidth. Tim claimed that Pandora accounts for 1.5% of global internet traffic on any given day. The gender makeup of Pandora users is split fairly evenly: 52% are male.

Tim gave a lot of figures on how people have lobbied US Congress to not raise royalty rates that internet radio stations like Pandora have to pay. This is an on-going struggle, but unfortunately I don’t have much information about it. In a bit of controversy, apparently a protest was held in June of 2007 to raise awareness of this issue, and according to this TechCrunch article, all the major net radio stations like Pandora joined, except Last.fm.

Pandora history

Pandora was originally called “Savage Beast Technologies.” (Read about the name Pandora) In September 2005 they launched a private beta that was intended to be used by friends and family only, though just 2 weeks later they had 5000 registered users, shocking Pandora employees and forcing them to react to respond to the tremendous growth. In November 2005 they dropped their required monthly payment (of $3) and repositioned Pandora as a free service, and from there growth accelerated even more quickly. When asked about why they don’t charge, Tim said simply “users won’t pay it.” It sounded like the company is extremely well funded by venture capital, as well as textual advertising which Tim said is successful, and tons of hardware partners (like the big mobile/cell companies) are linked up for negotiation. Sonos, Squeezebox, mobile phones and other hardware requires the $3/month or $36/year subscription, but apparently this is a small piece of the Pandora revenue.

Pandora’s mobile phone service called marketed as “On The Go” is available on at least a dozen Sprint mobile phones with more on the way. Tim was carrying a Samsung A900 and demonstrated how he can provide thumb feedback, for his personal recommendations in the same way he would as if he was listening to Pandora at the computer. Their vision is to have Pandora running on mobile phones from other providers as well as tons of other hardware. I asked him via email about Xbox 360 and PS3 support and he wasn’t specific, but said the company has plans for lots of living room hardware devices.

The Music Genome Project and SoundExchange

The largest portion of the discussion was dedicated to the Music Genome Project (Wikipedia link for MGP). Audience members were curious about how songs are analyzed. The Genome has about 500,000 songs profiles from about 40,000 artists according to Tim (July 2007 data). One surprising statistic: 95% of those songs are played every day! Tim said Pandora is adding about 15,000 new songs per month. 40-50 trained musicians classify songs based on nearly 400 different musical attributes–they call this that classification “musicology.” 54% of the music playing on Pandora is not signed to a music recording label, a statistic that sat very well with audience members, often disappointed by major label music on large (ClearChannel) radio stations around the country. 10% of the songs are classified twice for data quality, though Tim assured us that the trained Pandora music staff produces very objective evaluations of the music. Similar songs are played for Pandora users based on their “distance” from another song, how similar they are “musicologically.” Distance is calculated based on the 400 attributes that have been applied to the song to classify it, so Pandora tries to match the next song to be played to as many attributes as possible, then layers in your thumb feedback and more into the algorithm.

Artists that get their music played on Pandora are paid by the organization SoundExchange. Pandora seems to be largely out of the compensation sides of things, which to me makes sense as it would let them focus on the Genome Project, their software, and getting it on various types of hardware. Though much of the audience was curious about SoundExchange and how reliable they are. One audience member said he has had difficulty getting paid by SoundExchange. Tim said a big challenge that company faces is locating artists to be paid, as small bands are subject to more change.

The meetup was very interesting for me personally from music, software, hardware and business perspectives. I want to thank Tim for coming to Minneapolis to talk about Pandora, and hope that he comes again to keep us up-to-date.