Tim Westergren, founder of the personal Web radio service Pandora and the Music Genome Project, looked more like a rock musician than an entrepreneur when he spoke to a group of about 80 students Monday afternoon in the Kellogg School of Management's Jacobs Center. In jeans, a striped T-shirt and scruffy hair, he led a relaxed Q-and-A with Kellogg students and a few undergraduates.
The hour-long discussion provided insight into the creation of Pandora, a free service that asks users for songs they like in order to discover similar music they might enjoy, and the workings of the Music Genome Project, which analyzes songs based on their musical attributes in order to match them with user's preferences. Westergren gave the students an extended background on his transition from a struggling musical career to success with Pandora.
A large portion of the speech dealt with the company's slow start in 2000. Westergren and his team spent five years in debt before securing $9 million from venture capitalists in 2005. Broadband Internet used to be scarce in households, he said, so streaming music wasn't readily accessible. Today, Pandora has 12.5 million registered users.
"We want to be the greatest radio all around the world, broadcast or online," he said. "We think eventually that Clear Channel's ownership is going to be ours. We believe we can be there."
Westergren spoke with The Daily after the event.
The Daily: You were a musician for years before starting Pandora, with no background in business. What was the process of becoming an entrepreneur?
TW: Well, starting a band is a bit like being an entrepreneur. There are certainly parallels, but I had never started a formal business before. I had to just put one foot in front of the other.
The Daily: As a big player in the online music culture, do you worry about the invisibility of music in general? There always seems to be less of something to hold in your hands.
TW: Yeah I do, I do. I mean, I'm a musician. One of the big challenges for a musician is, "What do you create that people will want to acquire or buy? What's your transaction?" You do need something. I think people still want to own something physical. It will be some percent of people; it won't always be everybody. But I think some people will always want something physical, or at least some representation of music. But it's not going to be as much as it was before. It's going to be a challenge.
The Daily: Do you worry that the end of traditional radio could also bring the end of the radio DJ personality?
TW: Yeah, but I would like to find a way to bring them into Pandora, frankly. I think those people are really important as well, and we're certainly not helping their cause.
The Daily: Does every single artist featured on Pandora get paid when their song pops up on someone's station?
TW: Yes, it's a percent of the revenue. We pay a fraction of a penny per song for publishing and performance, to the songwriters and the performers. And once our revenue grows enough, we will be paying artists whichever is higher - a certain minimum or a percent of the revenue.
The Daily: Right now Pandora is illegal to use outside of the U.S. What stands in the way of Pandora being legal everywhere?
TW: Licensing, licensing. We operate in the U.S. under a statutory law, and that is not available in any other country. So no other country has actually put that one-stop licensing in place. So as soon as they do that, we are going to be able to jump right in, hopefully this year.
d-head@northwestern.edu
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