The success of internet radio service Pandora is testament to the power of personalisation. Founder and CEO Tim Westergren told the ARF’s Re:think conference in New York how the company has managed to reach nearly 50 million listeners and a market capitalisation of $1.75bn.
Pandora’s system is powered by a team of musicologists who analyse songs based on attributes like melody, harmony, rhythm and form, in what the company calls the Music Genome Project. It then selects and recommends songs based on what you tell it you like, and allows you to discover new music that matches your tastes.
The personalised approach has helped Pandora capture almost 6% of total radio listening in the US. At a meeting with Pandora users, one enthusiastic fan told Westergren that he loved using Pandora to listen to marching band music that reminded him of his days in the navy. Westergren said: “I realised over the course of the evening that he thought Pandora was a marching band music radio station. The service was so personalised he didn’t even know that our collection expanded beyond the kind of stuff he liked. To me that encapsulated exactly what we’re trying to be about.”
Pandora has sought to build a trusting relationship with users, encouraging them to share demographic and location data which can be used to personalise the service, and to target ads. Roughly 1,400 ad campaigns run each week on Pandora.
“We have a pretty good idea of what Americans are listening to, what they like and where they are,” said Westergren. “And we have the ability to communicate with them. You can target women in their 30s listening to punk music in the New York metropolitan area and hit only them.”
Personalisation can even be used to promote events - the company helped organise a free concert for 300 fans by singer-songwriter Aimee Mann in Los Angeles, by targeting people who had rated her songs positively on Pandora and lived near the venue.
In some cases, Pandora turns out to know more about people’s music tastes than they knew themselves. A Sarah McLachlan fan emailed Westergren to complain that he had been played a song by Celine Dion, whom he “hated”. But after exchanging a few emails with Westergren discussing why the song might have been picked, the user eventually came to the realisation: “Oh my God, I like Celine Dion.”