Another Great Thing About Canada

Canada does not have Pandora and that is a good thing. Let me tell you why: Pandora is an on-line music recommendation service that is taking listeners away from radio big time in the USA. And frankly it is not difficult to understand why the model works so well; Listeners sign in and enter a song or artist they like. Then Pandora builds a list of songs it feels this listener will enjoy based on 400 different musical attributes including harmony and tonality, to name just two. Listeners can also provide feedback telling the system the songs they like or dislike which allows Pandora to fine-tune the music so that it is more suitable for the individual listener.

So Pandora builds programming that caters to the tastes of individual music listeners which has resulted in over 80 million people signing up for the service. They are adding 60 new users every minute and they account for almost 50% of all online listening to music services in the USA.

You can listen on your computer but it is also available through a number of internet set top boxes such as Sonos and Grace Digital. But the amazing growth of Smartphones has really propelled this service into the big leagues. In 2008 only 10% of listening was being done on mobile platforms but that has grown in 2011 to 50%.  Over the past few months Pandora has been strengthening its partnerships with consumer electronics manufacturers and looking to grow the integration of its services in automobiles.

Pandora is attractive to advertisers not only because of the huge user base and the number of hours tuned, but they also can target advertising to users based on their age, and music preference. Revenue is growing via both the paid subscription service and the free advertising supported model. As Pandora is getting set to become a publicly traded company, Forbes has valued the company at $984 million. Pandora is a real force in the USA and a real headache for radio.

Fortunately this service is not in Canada, but I cannot imagine that will last forever. So what can we learn from what is happening in the USA?  Other than continuing to ensure our radio stations is producing content that is relevant and well targeted to our local market, I think we need to exist on all the platforms our listeners are using which include streaming audio on the web and via all the popular Smartphones. We also need to be looking at tablet computers such as the iPad. Apple sold over 5 million units in the last three months, and the demand continues to grow. I was in New York for Easter and watched hundreds of people standing in line just to get into the Apple store on 5th Avenue. These devices can be great for radio if we provide our listeners with great content that is of interest to them. So it’s all about content and delivery.