Mr. Internet Radio has built a company now valued at more than $6 billion
Tim Westergren’s most memorable moment of 2013 came when the name of the 8-year-old Internet radio service he co-founded went up on the building that houses its offices in Oakland, Calif. “I was really moved,” says Pandora’s chief strategy officer and public face of the country’s largest Internet radio service. “There’s something about a physical manifestation of what’s essentially a virtual business.”
Pandora’s name was certainly visible in 2013. Its monthly listener hours grew 13.7% to 1.6 billion in December. Monthly listeners grew 13.6% to 76.2 million—in spite of iTunes Radio, Apple’s foray into Internet radio, as well as improved products from Spotify and Slacker. Investors have taken note of its growth and improvements in mobile advertising. Shares of Pandora rose 189.7% and now value the company at more than $6.3 billion—more than three times the price that Universal Music Group paid for EMI Music.
Westergren’s name is basically synonymous with Internet radio. He has hosted town-hall meetings around the country to hear from listeners. His name is attached to emails asking listeners to support its efforts to change its statutory royalty structure—and is also attached to much of the criticism aimed at the company. The last two years have been filled with public rancor over Pandora’s payments to rights holders, artists and songwriters. Last year, Pandora’s purchase of a small broadcast radio station, ostensibly to pay lower ASCAP and BMI fees, attracted controversy from rights holders. The year ended with Pandora in court over the fees it pays songwriters and publishers through BMI and ASCAP. “It was not a pretty year for communication,” he says.
Westergren hopes for better discourse in 2014. Upcoming features will let artists control their identity and connect with fans on the platform. Westergren hopes these functions, collectively called Pandora for Artists, will change the conversation about the fees paid by streaming services. “Artists will get a window into the value of the platform,” he says, “and the discussion will be about growing the platform.”