×
You will be redirected back to your article in seconds

Pandora’s Acting CEO Naveen Chopra Charts the Road Ahead at Goldman Sachs Conference

The fact that Pandora’s interim CEO, Naveen Chopra, was the company’s representative at Goldman Sachs Communacopia Conference this week speaks to the state of transition in which the company has found itself in recent months. Pandora 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. In June, the company got a boost in the form of a $480 million investment from SiriusXM — although that deal has not closed — that will see it gaining a 19% stake in the company and three seats on Pandora’s board.

It also got $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). Three weeks after the Sirius deal was announced, co-founder and CEO Tim Westergren left the company. New CEO Roger Lynch, formerly of Sling TV, starts on Sept. 18 (although apparently his cover band is on point).

Pandora’s revenue in 2016 was $1.3 billion with losses at $343 million. The company had 4.85 million subscribers as of 2017. According to a spokesperson, Pandora Plus and Premium are expected to finish the year between 6 and 9 million subscribers. In a “fireside chat” Q&A at the Communacopia conference, Chopra spoke at length about where Pandora is and where it hopes to go. (Edited for context and clarity)

The company hopes to monetize its audience with advertising rather than relying on subscriptions
“Most central to the assets we bring to the business are our massive audience — 75 million monthly listeners, 100 million quarterly — which gives us a lot of opportunity to think about how we monetize,” he said. “Our audience has a high degree of engagement — just under 23 hours per month, like Netflix or Facebook. We’re also seeing days-active reaching all-time highs in the most recent quarter. We have taken a hit in the overall size of the audience, while we definitely need to address that issue and we have a number of initiatives [to do so], it is important not to lose sight of that highly engaged base. Layer that in with an advertising platform that is the largest [of its kind] in the country for audio digital advertising.”

“Our recent changes [in leadership] are consistent with our desire to shift and optimize strategy to play to our strengths. Whether you look at it in the context of changes in the management team, the board, or strategic partnerships, it’s all about giving our leadership the strategic support to rebalance the strategy, which has really been thinking about how we leverage our audience and maintain the health and growth of our listening ecosystem and monetizing it in the most effective way possible. Six to 12 months ago the company was really relying much more on pure subscription as driver of growth. Our rebalanced view [incorporating advertising] is more consistent with the changes we’ve made.”

The role Liberty and SiriusXM will take with the company remains to be seen
“Right now, they have no day-to-day role. We have not closed the transaction so right now they’re a financial investor. When we close it, they will take three out of nine seats on our board, and they will have a strong voice — which we welcome. To what extent they will really get into the day-to-day, I don’t have a sense yet. We will still be an independent company and looking to create value for all of our shareholders not just Sirius and Liberty. I think they’ll have a lot to learn about our business once they get on the inside.”

The company is undertaking a number of initiatives both to grow its user base and to monetize and maximize the users it has
“In order to attract more users, there are two to three things that are high priorities. One is going beyond music in terms of content offering: podcasts, additional radio offerings, because people don’t listen to music exclusively. Also, continued engagement with the new generation of audio devices, like Amazon Echo and Google Home — those are tailor-made for Pandora. Audio is our primary purpose, and we have found that to be the fastest-growing source of hours and new listeners.”

“As for bridging the gap between 75 million users monthly and 100 million quarterly — there is work to be done but I think we’re starting from a position of strength. Monetization is a place we’ve been very successful in the past, but I think there’s a lot of room to grow and frankly improve. I think from an ad-tech perspective we’re not where we would like to be.”

The company sees technology as a more promising path to monetization than increasing staff
“A number of things are going to be critical for us. Ad tech is a biggie and that’s not an overnight one, it’s an area where I think the company has underinvested over the past couple of years and there’s some catching up to do. Developing new ad formats is a critical part of our plan — advertisers demand a lot of innovation and we’re seeing the standards raise thanks to the Googles and Facebooks of the world, so that is an area where every few months you’ve gotta bring something to the table. I’d like to get it to a new level for us. As for the sales force itself, there are definitely opportunities s to expand, but it’s another area where I’d like to see us leverage tech more than we have.”

The company considers on-demand a key growth area
“Pandora Premium is doing a lot of the things we hoped it would. Pandora learned over the past couple of years that the No. 1 reason people left our ecosystem was a desire to have more control. For a lot of people, around 10% [of listeners], there is a desire to hear a particular artist or track, and prior to the launch of Premium, we basically told people to go somewhere else. We got to just under 400,000 Premiums at the end of Q2, which is basically our first three months, and it has helped us re-engage some of our younger audiences — which not surprisingly has the biggest appetite [for on-demand] — but we do still have more work to do. We’re not relying on the subscription model as much as in the past, but it still has to be a compelling product: we don’t offer a student plan or a family plan, we don’t have Premium on all of the platforms we would like, there are things we’d like to do in terms of social capability. It’s still relatively early days in terms of where we are with the product.”

Parting ways with Ticketfly creates more opportunities in the ticketing area
“Our thesis was that there is real synergy in joining ticketing platforms with listening, and what we saw in our experience with Ticketfly was, we were able to drive interest in events. But the trick is we don’t want to be beholden to a single ticketing platform. The first step in that regard was to develop our relationship with Eventbrite, which acquired Ticketfly. The basic concept is that we made commitments to promote and we get both compensation for that and some participation in the sale of the tickets. That’s a model we would like to replicate with companies that represent a large portfolio of events and audience.”

Expanding internationally is not for the faint of heart — Pandora pulled out of Australia and New Zealand earlier this year
“International is not an overnight build — it requires an appetite for investment and a way of acquiring customers, and we want to be sure we nail that model in the U.S. first.”

Alexa is an enormous growth opportunity …
“I look at that as huge opportunity. Those platforms are growing like wildfire, they’re the greatest source of audience growth — and they are by definition audio devices. Therefore, there is huge monetization potential on those devices that we don’t tap today; it’s really what mobile looked like four to five years ago, when the advertising capability was not near what it is today. We’re thinking about how to create more opportunities around radio advertising on those platforms — like, you’d hear an ad play and have the opportunity to say ‘tell me more.’ You don’t have that today. My sense is that the platform owners, Amazon, Google, or others, recognize the importance of having a healthy ad ecosystem within those platforms. We’re charging ahead and I think we’ll be breaking some ground in terms of creating ad formats and capabilities there.”

As are cars and “kitchen countertop” devices
“The car and [consumer electronic] devices do not monetize as well as the mobile platforms. Monetization is optimized when we can target, when listeners interact, and when we can measure. Auto has limitations — obviously it’s difficult to interact while driving. But interestingly, the answer to both of those is voice-based, which is an area that’s very important to us.”

More Music

  • DJ Snake Ozuna Selena Gomez Cardi

    Hitmaker of the Month: How Geffen's Neil Jacobson Took 'Taki Taki' to the Finish Line

    DJ Snake’s bilingual banger, “Taki, Taki,” is the latest reggaeton track to become a bona fide pop hit thanks to an alignment of stars (Selena Gomez, Ozuna and Cardi B) and the guidance of Geffen Records president Neil Jacobson. “There’s somewhat of an inexact science to making collaborative records like this,” says Jacobson, the veteran A&R [...]

  • Chris Brown rape allegation

    Chris Brown Released From Custody With No Charges Filed

    Chris Brown has been released from custody with no charges filed after being detained on rape accusations, a rep for the singer tells Variety, citing an Associated Press report.  Brown and two other people, who were not identified but reports said were Brown’s bodyguard and a friend, were released at around 10 p.m. local time, according [...]

  • Bob PittmanVariety Entertainment Summit at CES,

    iHeartMedia Bankruptcy Plan Approved, CEO Bob Pittman's Contract Renewed

    A U.S. court has approved the bankruptcy plan of iHeartMedia, the biggest radio broadcaster in the U.S., which will shave down its crushing debt load and separate iHeartMedia from Clear Channel Outdoor Holdings. The company said chairman and CEO Bob Pittman and Rich Bressler, president, COO and CFO, have extended their contracts by four years. [...]

  • Elton John and Mark Ronson

    Elton John to 'Shallow' Songwriter Mark Ronson: 'You're Going to Win the Oscar'

    Elton John is willing to bet that Mark Ronson will win the Oscar for Best Original Song for “Shallow” from “A Star Is Born.” The nominations were announced this morning. The legendary performer spoke to Ronson on the latest episode of his radio show “Elton John’s Rocket Hour” on Apple Music’s Beats 1.  Related Gender Parity: [...]

  • Andrea Ganis Promoted to President of

    Atlantic Records Elevates Andrea Ganis to President of Promotion

    Andrea Ganis has been promoted to the newly created position of president of promotion for Atlantic Records, it was announced today by Atlantic Chairman & COO Julie Greenwald and Chairman & CEO Craig Kallman. In her new role, she will continue to oversee all promotion activities for Atlantic and its subsidiary labels while serving on [...]

  • Gustavo Dudamel Walk of Fame Honor

    Gustavo Dudamel, Hollywood Bowl’s Biggest Star, Gets One of His Own Down the Hill

    Perusing conductor Gustavo Dudamel’s recent and upcoming schedule is enough to make anyone feel like a serious underperformer. In the past 12 months, Dudamel has guided the Los Angeles Philharmonic through half of its 100th season; made his debut with the Metropolitan Opera in New York; started an ongoing lecture/seminar series at Princeton University; toured [...]

  • oscar nominations 2019 stream online

    How to Watch This Year’s Oscar-Nominated Films

    The 2019 Oscar nominations have been announced, and if you want to catch up on the nominees, we’ve rounded up some easy ways to watch or stream the original films, documentaries, and songs competing for an award. Period comedy “The Favourite” and Alfonso Cuaron’s “Roma” lead the pack with 10 nominations apiece, while “Green Book” [...]

More From Our Brands

Access exclusive content