Pandora looks to coexist with other competing on-demand online music services as a way to discover new music, the company’s co-founder Tim Westergren said today at the Web 2.0 Summit in San Francisco, Calif.
“A power user for music would listen to Pandora, find some songs they like and then go buy them on itunes or listen to them on demand by Rdio or Spotify and use them in tandem,” Westergren said. “It’s not 100 per cent distinct, there’s obviously some overlap, but I think at a high level the place where we operate in the minds of users.”
Westergren said Pandora over time has become better at subsidizing long-term listeners with advertising. The company was able to do that by attracting more advertisers rather than selling the same set of users to advertisers. The company brought in $58 million in revenue in its most recent operating quarter from advertising, up from nearly $27 million in the same quarter a year earlier.
“You can get advertisers to pay a buck to reach a person once, you can’t get them to pay two bucks to reach them twice,” he said. “What really happened for us, as our company matured and advertising sales have matured, we become better at selling advertising and got a wider swath of advertisers.”
Subscribers make up around 13 per cent of Pandora’s revenue, while advertising makes up the rest of the company’s revenue. Most listeners choose to subscribe to get rid of the advertising, but it doesn’t bother most of the company’s listeners, Westergren said.
Spotify launched in the United States in July.