Now is the right time for founder Tim Westergren to again take the helm at Pandora and the company is carefully strategizing how to monetize its planned on-demand offering.
Those were some of the key points Vice President, Dominic Paschel conveyed to analysts at the Jeffries Technology Conference in Miami Wednesday.
Pandora is getting questions about why Westergren is again leading the company and Paschel says “He’s been at the company 17 years. It’s not like he stepped away,” though the firm was originally called Savage Beast, we learned.
Westergren has strength with five constituencies: consumers, music-makers, advertisers, investors and employees.
The overall goal is to keep Pandora users within its “ecosystem” more consistently and upsell them by using its user data and scale.
Asked why Pandora is getting into on-demand, a crowded space known for being less profitable, Paschel said: “We’ve created a core, profitable business than can grow revenue. … We’re not looking to create a me-too product,” but one that will be “extremely differentiated.”
The company has 60 billion elements of feedback from 300 million monthly users. It’s data is “tremendous,” he said.
However the company is being “realistic” about the expected conversion rate with a $4 billion target. Some $2 billion will come from the core Internet audio product, another $300 million is estimated to come from ticketing and sponsorships (from Ticketfly) and about $1.3 billion from on-demand over 5 years.
The company believes 10% is a reasonable conversion rate of 110 million active monthly users. It’s working with the music labels to “evolve” the current and new service.
