The goal is something of a holy trinity for the music business -- "a win for listeners, a win for artists and a win for venues," Phillips tells Billboard.
Why ticketing? The business can leverage Pandora’s huge dataset -- its learned a lot about its listeners over the last ten years. It knows which songs people stream often and which artists they like the most. (It surpassed 50 billion "thumbs," or likes, by its listeners in January.) This information, along with the zip code provided during registration and further opt-in geolocation data, creates an affinity profile that determines what shows are recommended to listeners. Ticketing can also add value for both artists and listeners. If people want to connect with their favorite artists, Pandora can help them buy their concert tickets. Artists and venues can use the notifications as well; artists can record their own audio messages, made easier with the recent launch of a mobile app for recording these messages, that tells listeners about a local concert; venues can also issue their own, specific to individual artists and events.
Here is where Pandora’s acquisition of music analytics company Next Big Sound comes into play: with Next Big Sound’s social media data, Pandora can help venues figure out if they’re booking the right bands. "We know if a band you’re trying to book has a large audience in an area," says Phillips. In this way, the Ticketfly buy starts to make even more sense in the context of Pandora's broader mission of playing nice with the music business as a whole after years of contention.
Pandora will also ask for permission to receive a listener’s latitude and longitude in addition to the zip code they provide, a far more detailed crosshair. "People move around," he explains. "[Latitude-Longitude] gives a more precise location. As feature goes live, we’ll ask listener in the app if they’ll give Pandora track location to offer tickets nearby. Even if they say ‘no thanks’ we can still surface based on where they live."
Although it will have to play the affiliate role for concerts ticketed by other companies, Pandora-plus-Ticketfly will allow listeners to buy passes within its app using the credit card already on file, a friction-free path from listening to purchasing that Phillips says has been a central goal for the project. "We wanted to deliver super-targeted ticket buying within the ticket experience. And from that let them tap, say they want a few tickets, and then pay." Phillips says Pandora won’t send irrelevant concert updates, only targeting the most appropriate listeners with the most appropriate concerts. (This type of specificity was said to have worked for Rhapsody and BandPage.) Recommendations can also go beyond a listener’s home market and can take into account a listener’s travel habits. If a person frequently travels to, says, New York on business, Pandora will notice, and recommend relevant concerts in that city.
With 80 million active listeners, Pandora has the ability, perhaps rivaled only by Ticketmaster, to deliver targeted concert notifications to around a quarter of the U.S. population, and roughly 30 percent of people over the age of 12. Not all of them are frequent concertgoers; Live Nation has long said its average customer attends one or two concerts per year. But Phillips, while declining to give an exact number, says Pandora sees "a pretty large number" of Pandora listeners frequently attending concerts, after cross-examining how Ticketfly events, artists and locations overlap with Pandora’s listener audience. "You’d be surprised," he assures.
Pandora isn't a bleeding-edge pioneer here -- other music services have waded into concerts, such as targeted links to merchandise and tickets sold by other companies. Songkick powers Spotify’s "Concerts" page, which recommends local concerts by favorite bands. When BandPage, recently acquired by YouTube, partnered with Rhapsody to send targeted push notifications about concerts it claimed to see a 50 percent increase in engagement. But that approach runs into a familiar problem when listeners are sent to another company’s web page: an average website can expect about half its visitors to leave without browsing further.
Ticketfly is part of a larger diversification plan for Pandora. Last year saw the company's revenue cross the billion-dollar mark, to $1.16 billion, up from $921 million in 2014. Net losses also grew, dramatically, from $30 million in 2014 to $171 million last year. At the same time, user growth flattened, and listening hours grew just five percent. Pandora needed to add value to its core product -- to do so, it could either expand internationally or begin making acquisitions to build a better product that offers more than non-interactive radio. It did both. In October, Pandora spent $450 million for Ticketfly; a month later it paid $75 million for some assets of bankrupt subscription service Rdio assets to use in building an on-demand service later this year and, it stands to reason, expand internationally.
If it works, listeners, artists and venues will all win, as Phillips said. But Ticketfly stands to win, too. Pandora has the potential to drive ticket sales, reduce unsold inventory and -- this is key -- help Ticketfly retain and attract clients. If Ticketfly benefits along with listeners, artists and venues, Pandora will have created a rare win-win-win-win.