Pandora Media

Pandora is an American music streaming and recommendation service headquartered in Oakland, California, and operated as a subsidiary of SiriusXM. Its core technology is the Music Genome Project, a classification system that describes individual songs by musical traits such as genre and instrumentation. The service originally launched as an internet radio product that generates personalized stations from those traits plus per-track listener feedback (thumbs up/down), adapting playlists in real time. Pandora is offered as a freemium product: a free advertising-supported tier alongside paid subscriptions that add improved streaming quality, downloads and offline channels. Pandora Plus, a $4.99 subscription tier, launched in September 2016, and in 2017 the company added Pandora Premium, an on-demand tier positioned against contemporary interactive streaming competitors.

The company was founded in 2000 as Savage Beast Technologies and initially operated as a business-to-business licensor of the Music Genome Project to retailers such as AOL Music and Best Buy, which used it for in-store kiosks. After that model lapsed, the company repositioned toward consumers and launched Pandora as an internet radio service in August 2005. Pandora listed on the New York Stock Exchange in 2011 under the ticker P and, at the time of its IPO, had roughly 80 million users and a library of 800,000 tracks from 80,000 artists. The service was distributed through the web and dedicated applications for smartphone platforms including iPhone, Android and BlackBerry, and at one point also served Australia and New Zealand before withdrawing from those markets in 2017 to focus on the United States.

The company also assembled a set of adjacent businesses, including music analytics platform Next Big Sound (acquired 2015), Rdio assets (2015) and audio advertising technology company AdsWizz (2018), while divesting ticketing arm Ticketfly to Eventbrite for $200 million in 2017. Following the SiriusXM acquisition, additional properties including Simplecast and Stitcher were added under the Pandora umbrella, and artist-facing tools were consolidated into Pandora's Artist Marketing Platform (AMP), which shares streaming data with partners such as Billboard, MRC Data and Chartmetric.

Founding story

Will Glaser, Jon Kraft and Tim Westergren founded the company in January 2000 in Oakland, California as Savage Beast Technologies, built around Glaser's concept of classifying music by traits and attributes, which became the Music Genome Project. Kraft, previously at Oracle and founder of Stanford Technology Group, served as founding chief executive officer from 2000 to 2002.

Business model

Freemium consumer audio service. Basic listening is free and monetized through banner, video and audio advertising, including advertising targeted based on the song being played, while paid subscription tiers (Pandora Plus at $4.99 and the on-demand Pandora Premium) remove limitations and add features such as higher streaming quality, downloads and offline channels. In its earliest years the company instead licensed the Music Genome Project to retailers on a business-to-business basis.

Advertising revenue from the free tier plus subscription fees from paid tiers. In 2016 the company reported revenue of $1.38 billion, of which $1.07 billion came from advertising, against a net loss of $343 million.

Traction

Reported 80 million users at IPO in 2011; 200 million registered and 70 million monthly active users in April 2013; a library exceeding 1.5 million songs by November 2014 with under 5% of active listeners paying; 81 million active users in early 2017 with 56 million using the Today's Country station; 76.7 million global monthly active listeners in Q1 2017; 71.4 million active users at mid-2018; and 55.9 million monthly active users with 6.4 million subscribers in 2021.

Latest developments

SiriusXM completed its $3.5 billion acquisition in February 2019 and Pandora continues to operate as a subsidiary. Pandora launched Pandora Stories in February 2019, and parent SiriusXM signed a multiyear Marvel podcast deal in October 2019. Stitcher was added to the Pandora group in 2023. The Next Big Sound analytics platform was shut down on November 1, 2021, with its capabilities folded into Pandora's Artist Marketing Platform and the Pandora Predictions chart discontinued. Reported user counts have continued to decline, to 46 million as of 2023.