Pandora, the next-generation online music streaming service, is looking at life beyond the web, embracing what’s emerging as the “device-agnostic” Internet.
"We became profitable for the fourth quarter of 2009, and now we're shooting for profits for the entire 2010 ," Pandora's chief technology officer, Tom Conrad, told industry pundit Om Malik. The 10-year-old company plans to reach that goal by embedding itself in a wide range consumer electronics devices that feature an Internet connection from auto dashboards, to home HD TV panels, to the ubiquitous smartphone.
In 2009, Pandora's U.S. audience of registered users reached 43 million and at present nearly 100 different consumer devices other than computers are streaming the service. In December 2009 alone, 3 million new listeners joined Pandora — of which 2.7 million of them activated the service on a device other than a computer, according to the company.
Malik points out that Pandora rapid growth is riding the crest of three major trends:
1. The marriage of computing and connectivity that can now take place without the shackles of being tethered to a single location. It's among the biggest disruptive forces of modern times, one that will redefine business models for decades to come.
2. The pervasiveness of the mobile Internet.
3. The availability of low-cost, always-on computers (aka smartphones) that allow sophisticated software to conduct complex tasks on the go.
Pandora got a big boost at the recently concluded CES trade show in Las Vegas, where it showed off the fact that its music service is now being embedded in high-volume devices -everything from thin LED televisions to Blu-ray players to digital frames that are coming to market in 2010, among them devices made by LG, Samsung, Sony, Sanyo, Haier, Divx, Toshiba and Panasonic. The biggest victory, Conrad says is coming from the embedding of Pandora in automobiles through partnerships with Ford, Alpine and Pioneer -three companies that are going to be putting Pandora inside their cars and automobile music systems, respectively. The service will piggy-back on 3G wireless connections on the latest generation of cell phones. Conrad notes that "Nearly 47 percent of radio listening is in the car.”
As Conrad explained, the web currently accounts for 20 percent of total radio listening, which means that Pandora needs to expand beyond just the browser if it wants to go after "80 percent of the opportunity." Meanwhile, the iPhone and Google’s Android platform have triggered the new smartphone-driven mobile era that has transformed Pandora into a true Internet powerhouse. In just 18 months, mobile (and other connected devices) have risen to account for nearly 30 percent of Pandora's usage.
Our prediction: Pandora will do to traditional, terrestrial radio what the web is doing to newspapers and TV. And that’s so cool!
Casey Kazan
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