He won't disclose revenue and said the company isn't yet profitable, but he, Kennedy and the others are focused on building a stand-alone company, not one that will be flipped for sale. Another revenue generator is a very tiny cut of the songs that users buy on Apple Inc.'sĪ button makes it easy to buy a song when you hear it on Pandora.īut Westergren said the company's biggest revenue comes from ads on the site. For an extra monthly charge of $8 for AT&T and $3 for Sprint, your Pandora stations can be streamed over the cellphone network. Which will stream Pandora over certain cellphones. Pandora recently signed two deals with cellphone companies AT&T Westergren has hit the limit with 100 personal radio stations. You simply pick an artist or a song, and Pandora automatically creates a live radio station that streams over the Web around that genre of music, based on its massive taxonomy of music of more than 500,000 songs. Consumers who don't want to see ads can pay $3 a month, but most of Pandora's 11 million registered users are willing to suffer through them. "It uses skills I never thought I would find a commercial use for." Flexible hours and the ability to leave for a few days for a gig is appealing, too. "It's a great job for a musician," said Rick Higgs, one of Pandora's first music analysts, who joined the company in August 2000. They are all trained musicians who have studied musical theory and most of them perform locally or around the country in their off hours. They complete a seven-page description of musical information on every song they listen to, and rank the musical attributes from zero to five. The music analysts at Pandora sit near a large set of windows at their PCs, piles of CDs at their side. Music is constantly added to the database on a daily basis. Much has been written since the site was launched in November 2005, but in essence, Pandora has created a sophisticated database it calls the Music Genome Project, a system for decoding the DNA of individual songs by 400 distinct musical characteristics. Pandora may not have been first, but its service is truly cool and it usually plays good music in the genre selected by the user, such as jazz, pop or electronic, including songs not often heard. He came up with the idea that Pandora should use its music-recommendation engine to create a Web-based radio station. Pandora got a round of $9 million in funding and eventually landed a chief executive, Joe Kennedy, who took the company through a major rethinking process. It also helped that Marcus, like Westergren, is a musician and calls himself an avid drummer. Then in March 2004, after Westergren made pitch number 348, he managed to capture the interest of Larry Marcus, a managing director of Walden Venture Capital. Which used the company's personalized music-recommendation engine in its touch-screen music-listening kiosks. The company signed two licensing deals at the end of 2003 that got some cash coming in, one with AOL, now a unit of Time Warner "It was either figure it out or go to Mexico," Westergren said. Driven by passion for his ideas, he never gave up. Venture funding was out of the question after the dot-com meltdown in 2000-2001. The front door was eventually plastered with an eviction notice from the landlord, Westergren maxed out 11 credit cards, and finally managed to get some bridge loans to get the company going again. A year and a half later, the company, then called Savage Beast Technologies, went bankrupt.īut through amazing persistence and belief in what he was doing, Westergren soldiered on. "Then everything went to hell in a handbasket," Westergren said in an interview in the company's main offices in downtown Oakland, where they take up half a floor filled with funky cubicles, musicians on staff, and CDs everywhere.
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