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How Pandora Plans to Bury Radio. See Their detailed Plan.

February 12, 2011
by Ed Ryan
Editor Radio Ink Magazine
edryan@radioink.com

The Pandora shot across your Radio station remote vehicle axle has just been made. "Traditional radio stations broadcast the same content at the same time to all of their listeners". Ouch. That hurts. Pandora says "we enable each of our listeners to create up to 100 personalized stations." Traditional Radio programmers have always shied away from even letting an in-studio DJ vary from the format. Can you imagine what they would say if callers wanted to program songs? How many times has the PD said this during an "all request hour": "only play the songs in the format." And here is Pandora making a life out of such consumer-driven lunacy. It's a dilemma.
(pic: Pandora CEO Tim Westergren) 

Laying out their game plan to the public Pandora says "we are redefining radio from the traditional one-to-many programming of broadcast radio to a truly personalized one-to-one radio listening experience". Isn't that what we always say? That our listeners love us. That our listeners have a special relationship with our morning show? That our communities and advertisers love our remotes? Or, had we lost that lovin' feeling about a decade after centralized voice-tracking took center stage?

Here is Pandora's detailed plan of attack. Put a check mark next to the items you are already doing. Put a red X next to the ones that fall through the cracks.

We believe the following competitive strengths will help us realize the potential of our opportunity:
- We Enable Personalization and Discovery.
- We Listen to Our Listeners. We continue to build a highly-recognized brand by providing a high quality service. - - We believe the greatest contributor to our growth has been our passionate listeners sharing their positive experiences with their friends, families and other music fans.
-Pandora has grown primarily by word-of-mouth, and as a result, we have been able to build our brand with relatively low marketing costs.
- We’ve Pioneered a Personalized Playlist Generating System. Our proprietary personalized playlist generating system enables us to predict listener music preferences and stream music content that is tailored to individual music tastes.
- Genotyping Music. Our music analysts measure up to 480 attributes per song that collectively capture a song’s musical attributes – everything from melody, harmony and instrumentation to rhythm, vocals and lyrics.
- Leveraging Individual and Collective Feedback. While listening to a station, our listeners provide feedback by selecting a thumbs-up (I like this song) or a thumbs-down (I don’t like this song). These “thumbs” teach us more about our listeners’ preferences and we use them to adapt and improve the playlist for each listener in real-time. In 2010, we received an aggregate of over three billion thumbs, and since the launch of our service we have collected over eight billion thumbs.
- Developing and Refining Playlist Generating Algorithms. We have developed, and continue to refine, complex mathematical algorithms that combine the musical analysis from the Music Genome Project with the individual and collective feedback we receive from our listeners to predict music preferences and generate personalized playlists.
- Building Our Catalog. We add thousands of songs per month to the Music Genome Project based on music selected by our curators, feedback from our listeners and independent submissions by artists. Our vast catalog of songs represent nearly every recorded musical genre, from classical, jazz, rock, pop and hip hop to post punk, Celtic and flamenco.
- We’ve Built a Multi-Channel Distribution Ecosystem. We work closely with our distribution partners, including manufacturers of smartphones, consumer electronics products and automotive sound systems, so that our listeners can enjoy personalized radio anytime, anywhere.

Questions for the Radio industry?
Does it bother you at all that Pandora will soon be in your dash? 
What are we going to do about it?
How many of you now have the Pandora app downloaded to your smart phone?

Feedback me at edryan@radioink.com




(2/14/2011 6:46:02 PM)
David--Yes, you did hear this before; however, satellite radio started as a paid subscription on a (then) brand-new hardware platform with no pre-existing users.

Internet radio is free, 95%-plus of everyone that matters is already using the platform (a computer or smartphone), and one doesn't have to be "visionary" to connect the dots regarding economy of advertising scale. See the difference?


- Will Baumann
(2/14/2011 6:45:56 PM)
David--Yes, you did hear this before; however, satellite radio started as a paid subscription on a (then) brand-new hardware platform with no pre-existing users.

Internet radio is free, 95%-plus of everyone that matters is already using the platform (a computer or smartphone), and one doesn't have to be "visionary" to connect the dots regarding economy of advertising scale. See the difference?


- Will Baumann
(2/14/2011 6:25:25 PM)
Didn't we hear the same thing about satellite radio?

- David
(2/14/2011 5:08:06 PM)
As the demographics for “decision makers” (the people who buy ads) change, current-form broadcast radio’s viability will diminish. If you have ANY doubt, spend a weekend with some 25-35 year old, smartphone carrying professionals and you’ll get the drift. The base-plus commission radio reps are going to have a really tough time with this crowd. Keep in mind that radio runs on ads—not programming (unless it’s something like NPR—or you have the luxury of being able to give it away for free). As we all know, on-air talent produces zilch unless an organization can create a revenue stream from it.

“Free” in-dash digital radio with all the essential features of broadcast radio will have a HUGE impact on drive-time ad margins and if you own a stick or two, you’re going to feel the pinch. National advertising will move to Pandora-like services. Mom and pops will stay with sticks (i.e. pay for ads) longer, but one has to wonder how viable those businesses will be if they fail to adapt to a more modern business model as smartphone carrying customers upload bar codes while walking the aisles to check for the best deals.

Times change; institutions and ideas that fail to adapt don’t survive. Witness the Pony Express, telegraph, newspapers, land lines, Borders, and Yellow Pages. Just because WE love broadcast radio does not mean it will linger in its present form and the math model for keeping it viable just isn’t there. You may want to think broadcast radio is going to be different from other obsolete technology, but it’s not. Well—enough from me; I’m off to the foundry to get a new hilt for my bronze sword.

- Will Baumann
(2/14/2011 3:15:18 PM)
When I want to know the artist on a song played by Pandora, I have to scan my smartphone; not wise when I'm walking much less while driving. Even then I may only know the album or cut name but see nothing about the artist or musicians (much less the recording date, etc). While I'm a Pandora listener, I still tune into my favorites radio stations to hear on-air talent giving me information that increases my enjoyment and understanding of the music. Not to mention traffic and weather conditions. Pandora's great but it won't replace radio. There's a reason we refer to on-air people as 'talent'.

- Jaime Arbona

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