What Does Pandora’s CEO Shakeup tell Us About Its Future?

We knew 2016 used to be going to be a yr of big changes for Pandora, however few anticipated this building. After greater than two years as CEO, Brian McAndrews is stepping down. Taking his position can be cofounder Tim Westergren, lengthy the public face of the streaming song company.

Pandora’s executive shuffle comes at a pivotal, fairly challenging time for the corporate. Having struggled to grow its roughly 81 million users closing year (and nonetheless reporting a monetary loss), the company is now poised to enter new territory this yr, each in a business and in a geographic feel.

In 2015, Pandora made three very fascinating—and completely completely different—acquisitions. the usage of the ability and expertise of Rdio, Pandora is now building an on-demand streaming service similar to Spotify. This will probably be layered on prime of the personalised radio provider that Pandora pioneered and has dominated for the ultimate decade. in the process, the company hopes to amplify to more countries. in contrast to other major tune streaming products and services, Pandora simplest operates in three international locations: the us, Australia, and New Zealand.

the corporate also sold concert ticket dealer Ticketfly, which it is now the usage of to construct options to help sell tickets straight away to enthusiasts throughout the Pandora tune carrier, as well as through the existing Ticketfly website and apps. For Pandora, the Ticketfly acquisition opens up new potentialities for both listeners and artists, however additionally it is—crucially—an additional income that is free of the pressures and complexities of licensing tens of millions of songs from labels and songwriters. As if all of that wasn’t enough, Pandora also bought subsequent giant Sound, a powerhouse of analytics about tune on the internet that is already being fused with Pandora’s personal mountain of listening knowledge.

Phew! So, in brief, Pandora is changing into a right away competitor to Spotify and Apple tune and a (smaller, not solely direct) competitor to Ticketmaster and bolstering its already insane information science capabilities so to better serve listeners, artists, and advertisers with a whole host of latest offerings for everybody concerned.

that is a tall order. So why switch CEOs in the midst of it? the corporate won’t comment on why McAndrews is out, even if it reportedly got here as slightly of a shock internally.

What’s more glaring is why Westergren may well be taking on. it can be straightforward to consider it like a Jack Dorsey moment: A founding nerd-turned-charismatic-leader returns to the helm of a maturing tech company to lend a hand reinvigorate it with a few of its authentic founding spirit. there is most definitely some actuality to that. it is also value noting that today’s shakeup (a few other executives are shifting their roles somewhat) comes amid rumors that Pandora is also on the lookout for a purchaser because the streaming song market will get dramatically more competitive.

but it surely’s exhausting to disclaim that Westergren’s personal imaginative and prescient is closely aligned with the strategic shift we’ve got been seeing at Pandora over the last few years. McAndrews, a decorated company executive, has spent most of his up to date profession working in challenge capital, advertising, and telecommunications after stints at ABC and Disney in the Nineteen Nineties. this kind of resume lends itself well to operating a media firm like Pandora. however as the aggressive landscape has modified and Pandora has failed to turn a profit, the company has began to department out into new industry territories and tighten its focal point on the item that made Pandora conceivable in the first location: song and musicians.

Westergren, who cofounded Pandora in 2000 and helped mastermind its “track genome” algorithm, at the beginning served as the corporate’s CEO from 2002 until 2004. In up to date years, he’s acted as the public face of the corporate, including via its controversial (and unsuccessful) efforts to cut back its artist royalty charges thru legislation. despite th e flack he acquired from some artists at the time, Westergren has all the time thought to be himself one thing of a champion of musicians. He himself is a composer and former touring musician, and he has helped promote efforts within Pandora to build out features that more immediately serve artists, reminiscent of its Artist advertising and marketing Platform (AMP). A extra latest characteristic referred to as AMPcast lets artists file quick audio messages (say, selling an upcoming album liberate) and broadcast them to listeners. Pandora has also helped musicians plan excursions by the use of its trove of listener information. The acquisitions of Ticketfly and subsequent giant Sound are a natural extension of this.

of course, none of these things is a silver bullet. Pandora already had an awfully troublesome industry adaptation in situation: Between hefty track licensing costs and the truth that ad-supported, free listening simply is not as beneficial as paid subscriptions, it’s been exhausting for Pandora to show a revenue. That was genuine even ahead of on-demand products and services like Spotify, Rdio, Apple music, and Tidal got here along and started nipping at listeners’ consideration spans. And whereas Apple’s 2013 launch of iTunes Radio did little to impact Pandora’s usage, Apple tune (full with the much-adored Beats One radio station and thoughts-blowingly good playlist curation) has been gaining traction quickly because it launched ultimate summer season. by the time Pandora manages to get its personal subscription provider off the ground, Spotify might be smartly earlier the 30 million subscriber mark and Apple would possibly no longer be that a ways behind.

The ultimate time Pandora got a new CEO used to be when McAndrews used to be hired in 2013. In those three short years, the tune streaming market has changed reasonably rather a lot—and it displays no indicators of stopping quickly. For Pandora, the exchange is it sounds as if most effective just starting.