Digital Audio Insider -- the economics of music and other digital content

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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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June 16, 2011

A Few Thoughts On Pandora
by David Harrell

Pandora has a lot going for it: It's the best-known name/brand in Internet radio and it has more than 90 million registered users, with 30 millions "active" users. Yet as noted in this WSJ piece, the newly-public company has yet to turn a profit. Like all Internet radio stations, it pays out a very large percentage of its revenue to music publishers and labels.

Also, unlike competitors such as Last.fm, Pandora has an additional expense, that associated with building and maintaining the "Music Genome Project," which classifies individual songs based on up to 450 criteria. A song's "DNA," as determined by Pandora's team of musicians and musicologists, along with listener feedback, is used to program individual Pandora stations.

So here's the big question: Does Pandora's Music Genome-based programming give it a competitive advantage? That is, does it result in a better listener experience than with Internet stations like Last.fm, where "similar" artists are determined by listener overlap (listeners of artist A also like artist B), as opposed to song qualities?

For me, the answer is a definite "no." I've tried Pandora multiple times and have never been impressed with the playlists. One example: when I played a U2 station, the next three artists it served up were Pearl Jam, Coldplay, and...the Goo Goo Dolls?! Coldplay makes some sense, but someone is going to have to explain to me how the music DNA of U2 suggests that the Goo Goo Dolls are one of the three most similar artists. (It's also apparent that, in addition to song DNA, Pandora uses a popularity component in its programming algorithm. If I create a station for my own band, it primarily serves up equally obscure artists. To be fair, I could easily hear why most of these artists were considered similar, based on the songwriting and arrangements. And I can completely understand the reason for including a popularity component -- while I'm open minded when it comes to music, you don't necessarily want to listen exclusively to acts you've never heard of before!)

I'm not saying the Pandora listener experience is a bad one, I just haven't found it superior to Last.fm or Slacker. The size of the company's user base and the business relationships it has established (deals with many car manufacturers) might well give it an ongoing advantage over its competitors. But in my opinion, music programming isn't a major differentiator for Pandora.

related: Prospectus for Pandora, Pandora's Seventy Percent, Some Quick Thoughts on the Quirk Presentation

tags: digital music Pandora P Internet radio

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THE LAYAWAYS

Out Now -- "Maybe Next Year" -- The New Holiday Album:

"This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

"Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

O Christmas Tree - free mp3 lyrics and song details
Away In A Manger - free mp3

Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.

"...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

"Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

"...melodic, garage-influenced shoegaze." -- RCRD LBL

Where The Conversation Ends - free mp3
January - free mp3
Keep It To Yourself - free mp3

Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.

"The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

"Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

Silence - free mp3 lyrics and song details
The Long Night - free mp3

Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

"These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

Let Me In - free mp3
Ocean Blue - free mp3

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More Layaways downloads:

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