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Pandora's drive for musical domination

Maggie Shiels | 11:32 UK time, Thursday, 6 January 2011

The personalised internet radio service Pandora is taking to the road.

Ahead of the opening of the Consumer Electronics Show in Las Vegas this week, the company has been announcing deal after deal after deal - and the event only officially starts today, Thursday.

So far the big focus for Pandora and its founder Tim Westergren is the news that it is getting into the auto business in a big way.

"Half of all radio listening is in the car. If you want to be a truly anytime, anywhere complete radio solution for someone, you have to have something for the car," Mr Westergren told the BBC.

"In the last couple of years that whole industry has woken up to the potential of personalised content in the car, which is becoming like a big rolling CE (consumer electronic) device. So the opportunity for us to get in there is extraordinary and right now we are chasing that hard."
Pandora system in Mini

 

In the last couple of days alone, Pandora has announced significant deals - one is with BMW as part of their connected "infotainment" system for the Mini allowing users to play Pandora on the radio by plugging in their iPhone. Toyota also announced a partnership with the the radio service by including it in its Entune infotainment system.

There were also announcements involving Seagate's GoFlex media player, Pioneer radio units and a number of TV manufacturers.

These partnerships and alliances underscore how the theme of having everything connected to the web is playing big at this year's CES. And the connected car is just one of those big trends. While it is not new, it does have more bells and whistles than in the past with enhanced navigation systems, tools to monitor fuel efficiency, social networking apps, aids to monitor the health of the car, and of course entertainment.

Interestingly Pandora nearly bit the dust a couple of years ago when internet radio services were being asked to pay what it saw as sky-high royalty fees for licensing music. Discord and disharmony ensued and the company said at the time it simply couldn't afford fees and would be driven out of business.

Fast forward to the summer of 2009 and a deal was reached that allowed the music to play on at Pandora and other services like it.

Tim Westergren

 

Mr Westergren said the licensing restrictions meant he had to block people outside the country using his service.

"The week or two we spent reading emails was one of the most depressing periods of Pandora. To turn off the service to someone who obviously really enjoyed it and really loved it was painful."

Today Pandora boasts over 75 million-plus users and is embedded in over 200 devices from cars to smart-phones and from Blu-ray players to connected TV's.

Next on the cards is world domination. Mr Westergren said he would start small by looking at the UK, China, India and Japan as among the first countries he would like to spread Pandora to beyond the US.

"Our next move will be partly decided by licensing models but being global is an absolute ambition of ours. To have billions of people listening to us all over the world, listening to all kinds of music and having it all connected and redefining radio will be a big cultural change.
 
"Our second goal is near and dear to me as a musician and that is what we could do to actually help musicians. Pandora and internet radio in general has a much broader capacity to include deep catalogues and emerging artists.
 
"We have over 80,000 artists and 70% of them are not with a major label so these are musicians that aren't getting played anywhere else and Pandora offers them this incredible exposure. When we have billions of listeners we could create a kind of musicians' middle class and that is one of our ambitions."

 

European music service Spotify can probably relate to Pandora's frustrations. While the model is different to that of Pandora's, its ambitions are not dissimilar in wanting to become the de facto way people listen to music.

The service had eyed the end of 2010 for launching in the US and now it seems such plans are on hold indefinitely following reports that the music labels wanted Spotify to pay more than it could afford to license music.

"I feel their pain and I hope they can figure it out," said Mr Westergren.

"They operate a different kind of business which requires direct licensing because they allow on-demand listening. Again I think the future of the music industry in general rests on finding the intersection between the royalties and payments that labels and artists need and deserve and the kinds of business models that will support services that people want. We have to find a mid line in that intersection," added Mr Westergren.

I am hoping to catch up with Spotify at CES later in the week.

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