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Inside Pandora Premium: How the Online Radio Pioneer Aims to Take on Spotify and Apple Music

Pandora is ready for you: The online radio pioneer is launching its $10 premium subscription tier this week with completely revamped apps for iOS and Android, which offer unlimited on-demand access to full albums and individual songs. And if you believe Pandora founder and CEO Tim Westergren, the new service will feel like it has known you for years.

“There is no cold start on Pandora,” Westergren told Variety during a recent interview. “Most adult Americans have used Pandora.”

More than 160 million users open the app every quarter; many millions have started their own stations on Pandora, given their favorite songs a thumbs up, or skipped over titles they didn’t like. The company now wants to use all of that historic listening data to fine-tune its new premium service, and play exactly the music that its users want to hear from day one forward. “It’s, in a sense, pre-curated,” said Westergren.

Using huge treasure troves of data gathered over years is a key component of Pandora’s strategy for its new premium service. Others include a completely revamped design, a mixture of human expertise and machine listening to curate playlists and stations, and a less-is-more attitude that led Pandora’s team to reject a number of albums available on competing services.

Variety was able to preview the new service for a few weeks before its official launch, and talk to key executives about the decisions that influenced its design and feature set. The result is a close look at a completely new Pandora that is still supposed to feel incredibly familiar.

A design that’s all about you

Simplicity is a mantra company executives stressed over and over again during conversations about the new service. “Most music apps still feel fairly complex,” said Pandora VP of Product Chris Becherer. And Westergren himself even suggested that there’s not that big of a difference between, say, Apple Music and Spotify. “They are all more or less the same: 30 million songs and a search box.”

Pandora’s new app, which can be used for both its existing radio service as well as its new on-demand tier, aims instead to get you started quickly, without the need to think long and hard about what you’d want to listen to. Upon launch, it automatically continues with what was playing last, and a gallery of album covers displays the most recent dozen or so albums, stations, and playlists you listened to.

Your music library is also being displayed as a list of recent plays in reverse — chronological order, not an alphabetized catalog of albums you may have added months or years ago, but not listened to ever since. And then there is the browse section, which shows a small and curated selection of new albums based on your taste — something Becherer likened to a record store that already knows you. “It’s kind of like a personalized end cap display.”

No playlist or album looks quite like another: Pandora’s new app takes its colors from the cover art of the song that’s currently playing. Screenshot: Janko Roettgers / Variety

Personalization doesn’t stop with music recommendations. For one thing, the new Pandora app automatically changes its color based on the album art of the song that’s currently playing. That’s a big departure for an app that used to stick to an iconic blue, and one that’s emblematic of the direction the company is taking for its on-demand service, according Becherer. Users are supposed to make the app their own, and chances are that the app rarely looks the same for any two listeners.

The company plans to further personalize the app in the coming months. Soon, it will roll out personalized search that automatically suggests results based on a user’s listening habits. “Most services would just rank things based on popularity,” said Becherer. Pandora instead wants to suggest things you’d actually listen to. “If you are into country music, this feels like a country music service.”

A smaller on-demand catalog, but more hits than anyone else

Here’s something that you don’t often hear music services brag about: Pandora will have fewer songs playable on-demand than most of its competitors — and the company’s executives couldn’t be prouder of it. “We have access to all that same music, but we are really applying curation,” said Chief Product Officer Chris Phillips.

Every company running a music service, be it Apple, Spotify, or Amazon, strikes licensing deals with all three major labels, plus a list of key indie label aggregators that pretty much gets them access to the same pool of music, save for a handful of exclusives here and there. However, included in those estimated 30-40 million titles are karaoke tracks, cover versions, and a ton of songs that simply try to piggyback on the success of more popular fare to make a quick buck. “There’s a huge amount that’s just chaff,” said Westergren — and Pandora is dead-set on not giving it any more play time.

Some of the albums that are available on competing services but didn’t make the cut for Pandora include sitar renditions of popular Michael Jackson songs, a whole album of Pantera cover versions literally played with farting sounds, and, incredibly, a tribute to Beatles tribute bands. “If there are people legitimately looking for this, they will have to choose other services,” said Phillips.

One of the albums that Pandora decided to skip: “A Tribute to Tributes of the Beatles” Screenshot: Janko Roettgers / Variety

At the same time, Pandora is able to offer access to many songs not available as on-demand versions on Spotify or Apple Music. That’s because Pandora is, at its core, still a radio service, and even consumers who choose to pay $10 for the ability to play entire albums will likely spend a lot of time listening to the service’s personalized radio stations.

However, there are different licensing rules for these stations, which allows Pandora to stream songs from albums like Jay Z’s “The Blueprint,” Aaliyah’s self-titled album, and a bunch of older Def Leppard recordings — titles that are all out of reach for Apple and Spotify. “In some ways, we have a bigger pool,” said Phillips. Granted, Pandora can’t play these albums on demand either, but the service can still sprinkle them into personalized stations, which may just be the next best thing.

Human ears and algorithms that can turn any song into a station

A better selection without frustrating fakes aren’t the only reason Pandora is weeding out a bunch of tracks. Pre-selection is also necessary for a key feature of the new premium service: Any album, song, or playlist can be the starting point for a new radio station.

This has been true for Pandora’s existing radio service for some time, where users can simply start a station by adding an artist or song title, and then occasionally steer the selection by giving songs a thumbs up or thumbs down. This functionality has been powered by something that the company calls the Music Genome Project — an ever-expanding database that includes information about the instruments used for a song, the level of distortion, the tempo of a track, and more.

When Pandora was founded in 2000, the company hired a bunch of musicologists, musicians, and other experts to listen to each and every track and meticulously catalog them according to hundreds of such attributes. That type of analysis was already hard to scale for a radio service with around a million tracks, but it’s close to impossible now that Pandora is getting its music from a pool of 30-40 million tracks.

The company has been working for a few years already on using machine learning to do some of the heavy lifting. Human curators still listen to and catalog a subset of an artist’s tracks. Then, the machines take over, taking their cues from the human curation. “The technology is listening to the music and applying the same attributes,” said Phillips. And when algorithms are unsure on how to categorize something, they bump it back up to have humans give it another listen. “Every single song in our catalog is curated,” said Becherer.

A magic button that turns orphaned playlists into hours of music. Courtesy of Pandora

Having every song indexed this way also helps Pandora with another neat trick of the new service: Users can add two or three songs to a playlist, and then simply press a button to have Pandora add additional songs that would be a good match.

This feature is in part based on lessons Becherer and some of his colleagues on Pandora’s product team learned when they were still at Rdio, the failed music streaming service that Pandora acquired in late 2015. “The majority of our users generated playlists with less than five songs,” Becherer recalled about his time at Rdio. Users often started an ambitious mix tape, then abandoned it, leading to what the team used to call “orphan playlists.” This new feature can help to turn those half finished playlists into full hours of listening. Said Becherer: “We are gonna save the orphans.”

Invites and incentives, but fickle investors

Pandora is going to first invite some of its heaviest users this week, and then gradually open up the new premium tier to everyone by mid-April. During this rollout, the company is going to dig deep into its usage data to identify users that might be interested in a premium offering. Users that often run into skip limits of the free service, or have built a lot of stations, may be getting invites first. And anyone who has subscribed to the company’s ad-free plus tier will get six months of premium without any extra charges.

Using a free tier to recruit paying users is not a new approach for the music business. In fact, subscription industry leader Spotify has been doing it since its inception, and banked on free to grow its paid audience to more than 50 million paying customers.

Pandora’s leadership believes it can do something similar, and in turn even steal some users back from Spotify — in particular users that have continued to listen to Pandora’s free tier while also paying for streaming elsewhere. There are many millions of those out there, said Westergren. “Pandora can be everything for you,” said Westergren. “The only place you need to go.”

At the same time, the company is going to keep investing in its existing free radio service, which currently reaches around 90 million listeners per month. The free service isn’t just a funnel, but also a complementary offering; a tier for everyone not willing to pay for a subscription. “The majority of our listeners will continue to be free, ad-supported listeners,” Westergren said.

Pandora’s dual approach got a thumbs up from music industry expert and MIDiA analyst Mark Mulligan. “Pandora could be a solid success story,” Mulligan recently told Variety. “They are doing it in a very smart way.” Still, Mulligan had some doubts that Pandora could compete on a global basis with giants like Apple and Amazon. The company’s investors have been fickle, sending its stock up every time an acquisition rumor emerges, and down again every time it gets squashed. Said Mulligan: “Pandora has learned the hard way that Wall Street does not like mature tech stocks.”

Westergren tried to downplay these issues. “That is just part of life as a public company.” He did acknowledge that the streaming music market will likely go through a phase of consolidation in the coming months. “You are going to see the smaller one absorbed or shutter.” But Pandora would stick around, he argued, and prosper, thanks in no small part to the new apps it rolled out this week. “The next couple years is all going to be about who is going to build a better product,” said Westergren.

With deep-pocketed industry giants, including some that can treat music as a loss leader to sell phones or other services, the fight over streaming music market share is only going to get tougher, and stealing market share from Apple and Spotify won’t be easy for Pandora. Still, Westergren seemed confident that his team was ready for the fight — after all, they had 16 years to practice for this moment. “We are not starting from scratch.”

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