LEVY: Lots of new companies are focused on digital music, but the labels are still conservative and mistrustful of the Internet. Can you explain this paradox? WESTERGREN: It’s partly a lack of understanding of the technologies and the contribution these sites can make. But I also think the group that ostensibly represents musicians really doesn’t represent the broad mass of musicians. I’m not sure that the opinions that we read about, and the opinions that get aired in Congress, reflect the real desires of musicians. Meanwhile, the Internet is providing a new way for all of these disconnected music lovers to find all of these disconnected musicians, and that’s why it’s growing so fast.
What would be the effect of the proposed royalty rates on your company? It would be the end of Pandora. And that’s not hyperbole. The real issue is the per-song rate. It’s wildly counterproductive for everybody. It triples our cost, and that’s in a business that already does not have a big margin to it.
Why aren’t the labels more encouraging, since Internet radio exposes their artists? It’s an extraordinary irony. But I think it’s a symptom of an industry that’s experiencing so much adversity in its core business. With CD sales down, they’re looking around and trying to grab what they can from other places. It’s killing the lifeblood of music, which is promotion.
You’ve been holding what you call “town meetings” with customers around the country. How did that start and what have you learned? I originally set off to travel around the country to find music, and someone suggested holding a meet-up. Two people came to the first event in New York City. And I just kept doing them. Now it’s not uncommon to have anywhere from 100 to 200 show up. Our development as a service is now largely determined by the feedback we’re getting.
Can you point to something that’s on your service now that arose from something you heard at one of those meetings? We now have a feature called QuickMix, which gives you the ability to toggle between stations, kind of like Pandora’s version of shuffle. That was listener-requested. People wanted to be able to organize their playlists alphabetically and chronologically, so we did that.
What’s next for Pandora? We’re really interested in finding ways to allow people to listen to it on the phone, etc. I don’t have anything I can talk about right now, but we want to make this an anytime, anywhere experience.
You look at a lot of new music. Why are there so few blockbusters? Is it a “long-tail” phenomenon, where people are separating into niches? The audience in general is starting to move down the tail. Technology is making it possible for people to focus their experience in ways that are relevant for them uniquely. On Pandora, there are hundreds of thousands of songs and artists that have been used as the seeds for listeners’ stations, so the entry point for our listeners is very broad.
Is this the best of times or worst of times for someone starting a band? I think it’s a great time to be a musician. There are some downsides, like the demise of the CD, which was an attractive economic base for a musician. But the access that you have now, as a brand-new band to a mass audience, is unprecedented. When I was in a band, all you could do was drive your van all over the country and try to find your audience, five people by five people. That’s a burnout.
