Around 36 hours after a report surfaced that Pandora cofounder Tim Westergren would step down as CEO, the company made the announcement officially on Tuesday morning. Westergren will also exit the board of directors, and CFO Naveen Chopra will serve as interim CEO while the board searches for a permanent replacement. In a press release filled with long quotes that was otherwise very terse, the company also announced today it has appointed Jason Hirschhorn, CEO of digital content curation company ReDEF and a veteran of MTV and Myspace, to its board, filling a recently vacated seat, and that president Mike Herring and CMO Nick Bartle are departing the company.
A rep for the company confirmed that Westergren will not be remaining with Pandora, the company he cofounded 17 years ago, in any capacity.
On behalf of Pandora’s board, board member Roger Faxon said, “Over the past several weeks, the board has taken a number of steps to refocus and reinforce Pandora. As listeners continue to move from traditional terrestrial radio to more dynamic and flexible offerings, it is the board’s belief that this transition continues to present a massive opportunity, and that Pandora is in an ideal position to capture an increasing share of this audience. With ‘digital radio’ at the core of our business, and both ‘Plus’ and ‘Premium’ as new, integral parts of our arsenal, Pandora now has all of the tools necessary to capitalize on this opportunity. With our comprehensive suite of offerings and a refortified balance sheet, we will be able to more effectively recruit listeners, and we will be able to provide them with more of the content they want and the services they desire in order to better retain them.”
Pandora board member Tim Leiweke added, “On behalf of the entire board, I would like to thank Tim for his vision and his many years of leadership that have created one of the most recognized brands in streaming music today. Tim stepped in to be CEO at a critical time for the company and was quickly able to reset relations with the major labels, launch our on-demand service, reconstitute the management team and refortify our balance sheet by securing an investment from Sirius XM. We support Tim’s desire to identify a new CEO for Pandora’s next stage.”
Westergren said, “I am incredibly proud of the company we have built. We invented a whole new way of enjoying and discovering music and in doing so, forever changed the listening experience for millions. I came back to the CEO role last year to drive transformation across the business. We accomplished far more than we anticipated. We rebuilt Pandora’s relationships with the music industry; launched a fantastic Premium on-demand service, and brought a host of tech innovations to our advertising business. With these in place, plus a strengthened balance sheet, I believe Pandora is perfectly poised for its next chapter.”
The news comes at a turbulent time for the company, which was a digital radio pioneer but has lost ground — and many millions of dollars — in recent years in its attempts to become a full-service streaming company as it lost listeners to services like Spotify and Apple Music. The company recently got a boost in the form of a $480 million investment from SiriusXM announced earlier this month — although that deal has not closed — and $200 million from the sale of its Ticketfly business to Eventbrite; the latter venture, an attempt to integrate ticket purchases with its streaming service, was an awkward fit that saw the company offloading the acquisition at a big loss after its October 2015 purchase for $335.3 million (not $450 million, as widely reported).
Sirius acquired a 19% stake in the company and three seats on Pandora’s board in the deal, which does not seem unrelated to Tuesday’s announcement. Westergren cofounded the company in 2000 and served as CEO from 2002 until 2004 but then became chief strategy officer; a series of executives succeeded him most recently Brian McAndrews, who Westergren replaced as CEO in March 2016.
The company generated $5 billion in revenue and $746 million in net income in 2016, although it also lost $132 million in the most recent quarter. The company had 31.6 million subscribers at the end of Q1 of 2017, and expects to add 1.3 million paying subscribers in 2017.
“We are also thrilled to welcome Jason Hirschhorn to the board,” said Leiweke. “Jason is a uniquely talented individual who brings highly relevant consumer media experience to our board and will lend valuable counsel as we focus on driving long-term value for our shareholders. With this new addition to the board, as well as our recently announced partnership with Sirius XM and our sale of Ticketfly, we have added significant intellectual and capital resources to Pandora, and we are confident that the company is in a better position than ever to capture an increasing share of the music listening audience.”
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