I was fortunate enough to hear Pandora founder Tim Westergren speak this week at the Las Vegas Interactive Marketing Association‘s 2010 Emerging Media Planning Summit at the Palms. I’m a fan of Pandora, though I don’t use it quite as much now that I’m working out of an office instead for from home. I need to set it up on my iPhone to remedy that …
Westergren believes Pandora is empowering musicians and helping to drive a new business model for the industry. Once a band hits Pandora, it can find an audience that normally might take years to develop (if ever). I’ve seen this first-hand. As Pandora sifts through its vast catalog of music looking for things I might like, it turns up bands I’d never uncover on my own or via the traditional recording industry. And I’ve gone from Pandora to iTunes to purchase music after discovering it.
This, Westergren argues, is empowering a “musician middle class,” artists whose music finds an audience, enabling them to quit their day jobs and live off their music. They might not be getting rich, but they can make a living.
Other notes from his speech:
- Westergren is a musician himself. He lived out of van for a while, and during his time scoring music he came up with the general paradigm for Pandora. When the final cut of the movie was done, he and the director would each gather up a stack of CDs they liked and get together to listen to them. Through that process, he’d get a sense for what the director liked and disliked, which would help inform the score. It was only a few steps from there to the Music Genome Project and ultimately to Pandora.
- 60% of the music played on Pandora comes from independent artists. Pandora prompts 1 million iTunes purchases per month, and the purchases it spawns on Amazon mostly come from music that is low in the total sales rankings. This is truly a Long Tail play …
- The site has 35 million registered users.
- Mobile is changing things. There already are 10 million mobile listeners, and traffic patterns are reflecting this mobility. Traffic used to spike at 9 a.m. Eastern and fade at 5 p.m. Pacific as people left their work stations. Mobile users are causing traffic to be distributed more evenly throughout the day …
- While listening to Pandora, users tend to go to the site 7 to 8 times per hour to gives a song thumbs up, change play lists, skip songs. This spawns an ad avail change and signals a higher level of user engagement that one might expect from a more traditional “radio on the Internet” strategy.
- Ad avails are interesting. They take up about 60 percent of the screen and feature interactive components that appears to provide advertisers with a lot of value. No mention, however, of pricing or CPMs. I should have asked …