![]() ![]() The first is to break down a song to its “DNA” level, identifying and rating elements like meter, tonality, tempo, instrumentation. Essentially the idea requires a two-pronged approach. It’s aim was as bold as it’s concept was simple: to create a database of discrete musical characteristics for a given song in order to identify other songs with similar qualities. In 2000, Tim Westergren and a small team of entrepreneurs launched the Music Genome Project. To best understand Pandora’s success, however, requires going back to an idea that was a commercial failure. You can read my comparison of personalized stations between iTunes Radio, Pandora and Spotify to see how each service fared head to head. While on a per user basis this data is obviously attractive to advertisers (Pandora also offers a paid ad-free subscription option) when you combine it in aggregate among the entire user base and then couple it with the company’s unique song classification system you’ve got a formidable lead in song recommendation that may prove difficult for even Apple to make up. In addition to data like age, gender and zip code that you provide at signup, Pandora tracks not only all the songs you’ve liked (thumbs up) and hated (thumbs down), but where and when you listen and which devices you use to do so. Pandora’s chief edge over rival streaming services lies in its eight-year cache of more than 200 million users’ listening habits. To do this consistently requires big data and the ability to leverage it in meaningful ways. Indeed the most attractive premise of streaming radio – and the area where Pandora excels – is that listeners can create stations that play songs matched to their individual tastes, with only minimal user input. Pandora has garnered its sizeable following by impressively delivering on its promise to “give people music they love”. But the Oakland-based company’s advantage over its competitors – which now include Apple’s AAPL -0.09% iTunes Radio – goes beyond monthly listener metrics. Pandora, founded in 2000, announced last month that it has 100 million registered users in the United States and 36 million monthly active users.With a monthly audience of more than 72 million active listeners, Pandora’s lead in the streaming radio market is a significant one. ![]() Pandora made its debut on the New York Stock Exchange in June at $16 a share. Pandora shares were up 2.81 percent at $12.82 in after-hours trading after gaining 3.31 percent during the day on Wall Street. Pandora said it expected third quarter revenue of between $69.5 million and $72.5 million and full-year revenue of $270 million to $275 million. Pandora said total listener hours rose 125 percent in the quarter to 1.8 billion, giving the service an estimated share of total US radio listening of 3.6 percent, up from 1.8 percent a year ago. "Pandora continues to grow our market share of US radio as we fundamentally transform one of the last forms of traditional media," Kennedy said. "In addition to continued high growth in Web revenue, Pandora's mobile advertising revenue for the first time comprised approximately half of total advertising revenue," Pandora president and chief executive Joe Kennedy said. Advertising revenue was up 118 percent to $58.3 million, while subscription and other revenue rose 112 percent to $8.7 million. It had posted a net loss of $389,000 in the same quarter a year ago.īut revenue rose 117 percent in the most recent quarter to $67 million. The Oakland, California-based Pandora, which creates personalized radio stations for users based on their favorite artists or songs, had a net loss of $3.2 million in the second quarter of its fiscal year. ![]()
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