Pandora (service) facts for kids
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| Type of business | Subsidiary |
|---|---|
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Type of site
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Music streaming service |
| Available in | English |
| Founded | January 2000 (as Savage Beast Technologies) Oakland, California, U.S. |
| Headquarters | Oakland, California, U.S. |
| No. of locations | 7 |
| Area served | United States |
| Founder(s) | Will Glaser Jon Kraft Tim Westergren |
| Services | Internet radio |
| Employees | 1,938 (2019) |
| Parent | Sirius XM (2019–present) |
| Subsidiaries |
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| Advertising | Banner ads, video ads, audio ads |
| Registration | Optional (required to save stations) |
| Users | 55.9 million active (2021), 6.4 million subscribers (2021) |
| Current status | Active |
| Native client(s) on | Universal Windows App, iOS, Android |
| Written in | Java |
Pandora is a popular music streaming service in the United States. It is owned by Sirius XM, a big broadcasting company. Pandora helps you discover new music based on your tastes. It uses something called the "Music Genome Project" to understand songs. This project looks at musical traits like genres and the instruments used.
Pandora started as an internet radio service. It created personalized music stations for users. You could give a song a "thumbs up" if you liked it. This helped Pandora learn what music you enjoy. The service offers a free version with ads and a paid version without them. In 2017, Pandora launched "Pandora Premium." This version lets you pick specific songs to listen to, like other streaming services.
The company began in 2000 as Savage Beast Technologies. At first, it planned to sell its music recommendation technology to stores. But in 2005, it changed focus. Pandora then launched as an internet radio service for everyone. It is a freemium service. This means some basic features are free, but you pay for extra things. Paid features include better sound quality or listening offline.
In February 2019, Sirius XM bought Pandora for $3.5 billion. In 2021, Pandora had about 55.9 million active users each month. About 6.4 million of these users paid for a subscription. By 2023, Pandora had 46 million users.
Contents
How Pandora Started
The Beginning of Savage Beast
In 2000, Will Glaser, Jon Kraft, and Tim Westergren started Savage Beast Technologies. Will Glaser had an idea to classify music by its different features. He called this the "Music Genome Project." The company first wanted to use this idea to help online stores recommend music. But this plan changed after the "Dot-com bubble" burst in 2000.
After that, the company tried to license its technology to other businesses. For example, AOL Music and Best Buy used it. Best Buy even tried it in their stores on special kiosks.
Facing Challenges and Finding Success
The company faced money problems and used up its first $2 million by 2001. The founders convinced their 50 employees to work without pay for two years. This led to a lawsuit in 2003 because it was against California law. After settling the lawsuit, a few employees left.
In 2004, a company called Walden Venture Capital invested $8 million. They hired Joe Kennedy as the new CEO. After working with Best Buy and Borders, the company decided to focus on regular users. This led to the creation of Pandora as an internet radio service. It used the Music Genome Project to personalize music for listeners.
Pandora officially launched in August 2005 after a testing period. It started as a paid service. But in November, they added a free version with ads. This happened because many users were creating new email addresses to get more free trials. Ads could also be chosen based on the song playing.
Pandora's Growth and Changes
Becoming a Public Company
In 2011, Pandora became a public company. This means its shares could be bought and sold on the New York Stock Exchange. At that time, Pandora had 800,000 songs from 80,000 artists. It also had 80 million users. By mid-2018, Pandora had 71.4 million active users.
In April 2013, Pandora announced it had 200 million users for its radio service. This included 70 million users who were active every month. By December 2013, Pandora made up 70% of all internet radio listening in the United States.
On September 1, 2013, Pandora removed a 40-hour-per-month limit for free mobile listening. By October 2014, less than 5% of active listeners were paying subscribers. By November 2014, Pandora had almost doubled its music library to over 1.5 million songs.
New Features and Focus
On September 15, 2016, Pandora launched "Pandora Plus." This was a new $4.99 subscription service. It was designed to compete with other music streaming services.
In early 2017, Pandora shared that 56 million of its 81 million active users listened to the Today's Country station. Country music was very popular, with over 1.7 billion hours streamed in 2016.
On July 31, 2017, Pandora stopped its services in Australia and New Zealand. The company wanted to focus only on the U.S. market.
In September 2017, Roger Lynch became the CEO. He wanted Pandora to focus more on podcasts. He aimed to add similar discovery features for podcasts as they had for music. In January 2019, Roger Lynch left after Sirius XM bought Pandora. Jim Meyer, the CEO of Sirius XM, took over.
On February 26, 2019, Pandora launched "Pandora Stories." This tool helps artists create playlists with their own voice recordings. They can add stories and deeper insights about their music.
In October 2019, Sirius XM, Pandora's parent company, made a deal with Marvel. They planned to launch superhero-based podcasts in 2020.
Companies Pandora Acquired
Pandora has bought other companies to grow its services.
- On June 11, 2013, Pandora announced it would buy FM radio station KXMZ in Rapid City, South Dakota.
- On October 7, 2015, Pandora bought Ticketfly, a ticketing company, for $450 million. It later sold Ticketfly for $200 million in June 2017.
- In November 2015, Pandora bought assets from the streaming music service Rdio for $75 million. Pandora hired 100 Rdio employees.
- In March 2018, Pandora announced it would buy AdsWizz, a company that makes digital audio ad technology, for $145 million.
- In February 2019, Sirius XM bought Pandora for $3.5 billion.
- In June 2020, Sirius XM bought Simplecast, a podcast service provider. They added it to Pandora's services.
- In July 2020, Sirius XM bought the Stitcher company for $325 million. Stitcher's exclusive podcasts were then added to Pandora. Stitcher had nearly 14.5 million weekly users at its peak.
How Pandora Works
Listening to Music
Listeners can choose from existing genre stations. They can also listen to stations created by other users. Or, they can make their own stations based on their favorite music. You use "thumbs up" and "thumbs down" buttons to show if you like a song. This helps Pandora decide what to play next. If you give an artist two "thumbs down" on a station, that artist won't play on that station anymore.
A "thumbs down" skips a song right away. However, there's a limit to how many songs you can skip. You get more skips if you have a paid subscription or watch a video ad. Pandora uses over 450 musical features to pick the next song. These features are grouped into 2,000 "focus traits." Examples include how a rhythm is played or the harmonies in vocals.
Pandora offers a free service with ads. It also has a paid subscription called "Pandora Plus." This plan used to be called "Pandora One." Pandora Plus lets you listen offline and gives you more skips and replays.
Pandora Premium
In March 2017, Pandora launched a third option called "Pandora Premium." This service lets you listen to and create playlists of specific songs. It's similar to services like Apple Music and Spotify. Pandora's recommendation system can also create playlists of similar songs for you. Pandora also focuses on using computer learning and human experts. They filter out low-quality content like "knock-off covers" or karaoke tracks.
In October 2019, Pandora added full song credits to its app. This shows who helped create each song.
Listening Limits
At first, free users could listen for 40 hours a month. They could pay $0.99 for unlimited listening. In September 2011, Pandora removed this 40-hour limit. But it was brought back in March 2013 for mobile devices. However, this limit was removed again in September of the same year.
In September 2016, a rewind feature was added. This allowed users to replay a song. The updated service also let users skip more songs per hour if they watched an ad. Before that, users could only skip six songs in an hour.
Devices That Support Pandora
Pandora apps are available for Android and iOS phones. There are also apps for Apple Watch and Wear OS smartwatches. An app for the Pebble smartwatch was available before that platform stopped working. Pandora also works with smart speakers. In January 2019, voice control was added to the mobile apps.
How Pandora Makes Money
Advertising and Subscriptions
In the three months ending October 31, 2011, ads made up 88% of Pandora's total money. This was 80% in December 2013. Pandora makes money from ads based on how many times they are shown. The more users Pandora has, the more money it can make from ads. Pandora also works with companies that make computer chips. This helps Pandora's technology be included in devices like those from Panasonic, Samsung, and Sony.
Pandora's biggest cost is paying for music. About 50% of its total costs go to getting content.
- First, SoundExchange collects fees for the actual song recordings. These are the largest costs.
- Second, Pandora pays licensing fees to groups like BMI, ASCAP, or SESAC. These fees pay the people who wrote and published the songs.
- Lastly, Pandora pays TiVo Corporation for song and artist information.
In January 2011, Pandora met with banks to consider selling shares to the public. The company officially started trading on the New York Stock Exchange on June 15, 2011. Its shares were $16 each, giving the company a value of almost $2.6 billion.
Pandora reported $80.8 million in total money for its first quarter of 2012. This was a 58% increase from the year before. Of this, $70.6 million came from advertising, and $10.2 million came from subscriptions. Most of Pandora's users still use the free, ad-supported version.
Advertising Methods
Pandora first offered a paid service with no ads. But most U.S. users didn't want to pay. So, in December 2005, Pandora sold its first ad.
In 2015, Pandora started playing more ads per hour in some areas. Pandora usually plays no more than six ads per hour for free users.
There are a few ways Pandora advertises. Audio ads are 15 to 30 seconds long and play about every 20 minutes. Users only hear ads if they are actively using the site, like giving a "thumbs up" or "thumbs down."
There are also banner ads on the website's background. These ads can be clicked to offer coupons or product information.
Pandora's advertising works by collecting data from what users do online. This data helps the company show users ads that are specific to their interests. This is called behavioral advertising. Pandora lets users choose not to receive these targeted ads. If you opt out, you will still see general ads, but they won't be based on your online activity. Pandora's ads do not offer local content like news or weather.
Different User Groups
Pandora has created two main groups for its ads: one for Spanish listeners and one for English listeners. This helps Pandora customize ads for different users. To do this, the company compared its user data with the U.S. census. This helped them find areas with many Hispanic and Spanish-speaking people. Then, they tested ads to see which listeners fit into these groups.
See also
- List of Internet radio stations
- List of online music databases
- List of streaming media systems
