Pandora Westergren Speaks For DiMA Before Congress

songwriters and music publishers.

Something unique about Pandora is that all music, once analyzed by

our musicologists and entered into our database, wins and loses

audience in the purest of democratic processes. If listeners vote

“thumbs up” a song and artist are electronically added to more

station playlists, the exposure is greater, and more people can

offer opinions about that music. If listeners consistently vote

“thumbs down” then the song is performed and heard less. Not even my

musical tastes or the CEO’s favorites can modify the purity of how

our musical taxonomy determines all Pandora radio performances.

Equally unique is the breadth of our playlist. Pandora musicologists

will review any CD that is delivered to us, and in most cases enter

it into our database and make it available for our millions of

listeners to hear. Pandora’s collection includes hundreds of

thousands of songs across the genres of Pop, Rock, Jazz,

Electronica, Hip Hop, Country, Blues, R&B, Latin and in just a few

weeks, Classical. These recordings range from the most popular

artists to the completely obscure, and each month our nearly fifty

musicologists analyze and add roughly 14,000 new songs to the

catalogue – a very deliberate process that requires between 15 and

30 minutes per song.

There are no prerequisites for inclusion in the Music Genome

Project. Indeed, it is quite common for us to add amateur homemade

CDs to the service. As a card-carrying independent musician I am

proud to report that fully 70% of the sound recordings in our

collection, representing over 35,000 artists, are recordings of

artists who are not affiliated with a major record label. Most

important, because we rely only on musical relevance to connect

songs and create radio playlists, all artists are treated equally in

the playlist selection process and as a result independent music is

likely heard more on Pandora then perhaps any other popular radio

service. More than 50 percent of Pandora radio performances are from

independent musicians, compared to less than 10 percent on broadcast

radio.

What qualities are unique about “new media” radio, and what benefits

are associated with those qualities?

In one sense multimedia convergence has already blurred the line

between traditional ‘terrestrial radio’, Internet radio, mobile

radio, cable radio, satellite radio and even community radio. For

example:

adaptor you can listen to that Internet radio through your car

stereo.

and while content is focused locally, an audience is available

(and may actually listen) globally.

XM, but in only a few years cars will have WiMAX broadband access

and you will be able to enjoy Internet radio directly and throw away

the adaptor I just spoke of.

To a listener who is hearing a single station at a given time, it is

just radio and their choices are amazing – which content do I want

to hear, when do I want to hear it, and on what device?

But in another sense, Internet radio is uniquely different from

broadcast, satellite and even low-power FM radio, because on the web

there are virtually no spectrum limitations and therefore no

capacity or scarcity issues. As a result, Internet radio offers

almost unlimited “stations” which results in unlimited content

diversity.

For music fans, Internet radio means no longer being

confined to local or even satellite stations playing homogenous

music for broad audiences of thousands or tens of thousands of

listeners. Instead, individuals can hear the types of music they

enjoy and simultaneously discover new songs and artists that would

otherwise be literally invisible to them. Unconstrained by spectrum

limitations, webcasting has created a genuine explosion of

accessible musical diversity. Lute music, classic country, jazz,

klezmer, dixie, gospel, Latin and Hawaiian music – you name it and

you can find it – every kind and color of music has found a home and

connected with its audience, no matter how small, on the Internet.

Another unique feature of Internet radio is click-to-buy purchasing

opportunities, and immediate access to artist information, including

the artist’s promotional website and tour schedule. Pandora is a

powerful platform for recording companies and artists during this

tumultuous period for recorded music. An August 2007

Nielsen/NetRatings research study concluded that Pandora listeners

are three to five times more likely to have purchased music in the

last 90 days than the average American. Similarly, Pandora is one of

the top referral sites for music purchasing from both Amazon.com and

the iTunes Music Store. Other studies have documented that Internet

radio listeners are generally more engaged with music, they talk

about it more and attend more performances, and they inevitably

promote artists and music through word-of-mouth marketing.

Finally, of course, there is the issue of royalties to performers

and recording companies. As you know, traditional broadcasters do

not pay royalties but the rest of us – cable, satellite and Internet

radio – do pay. You may not be aware that Internet radio has the

smallest of all radio revenue streams, but we pay proportionately

the highest royalties.