Tuesday, March 9, 2010

What's Next For Pandora?

With 48 million users listening 11.6 hours a month, Pandora can say they are a success. However, it wasn't always that way. It was in 2009 that Pandora had their first profitable quarter and before that, the music streaming site was struggling to exist. In 1999, creator Tim Westergren started the company through donations of angel investors. It began as Savage Beast Technologies and sold music recommendation services to larger companies such as Best Buy. By the end of 2001 he was broke and begging workers to stay for no pay. In 2004, Westergren made his lucky 348th pitch and landed a $9 million investment from venture capitalist Larry Marcus.

From there, the focus shifted from the business to the consumer, which was when Savage Beast Technologies became Pandora. In 2005, Pandora sold its first ad and things were looking up, until 2007 when a federal royalty board had increased the fee that online radio stations had to pay for individual songs from record labels. With a lobbyist in Washington D.C., Pandora managed a lower rate and were able to maintain their business.

In 2008, the iPhone app allowing streamed music from your phone set the company ahead with 35,000 new subscriptions a day. What's next you wonder? Well, it has been announced that Pandora has a deal with Ford and their voice-activated system, where drivers can simply say "Launch my Lady GaGa radio" and your Pandora playlist will begin. Samsung, Vizio, and Sonos are also integrating Pandora in their electronics.

"Think about what made AM/FM radio so accessible,” said Mr. Kennedy, Pandora’s chief. “You get into the car or buy a clock for your nightstand and push a button and radio comes out,” he said. “That’s what we’re hoping to match.”

Source: http://www.nytimes.com/2010/03/08/technology/08pandora.html

By: Rebecca Weyhrauch

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