Pandora CEO Reportedly Finished
As the world of consumer media consumption becomes whatever it’s becoming next, the losers are supposed to be the traditional media delivery vehicles, most notably CDs and, in some cases, even digital downloads. Streaming music is supposed to be the wave of the now, leading into the future. But, apparently, “supposed to be” isn’t good enough.
Pandora CEO and co-founder Tim Westergren is out as CEO of the online music provider. After founding the company in 2000, Westergren was previously CEO for two years in the early 2000s. Now he’s out, again, and, at least Wall Street is happy about it. Shares of Pandora slipped up about 5 percent on the news.
The timing of this announcement is interesting. Less than a month ago, SiriusXM announced its intention to invest about $480 million in Pandora, roughly a 16 percent stake in the company. But even that news didn’t help a company that is absolutely flailing, down 35 percent this year alone.
But what will Westergren’s departure mean for other potential Pandora suitors? Verizon has been rumored to be sniffing around, potentially interested in getting a stake. And there have been others.
There’s no doubt Pandora needs some kind of boost. Competition is fierce in the upstart streaming music market, and competitors are doing well at Pandora’s expense. Services like Spotify, which competes head-to-head with Pandora, as well as Apple and Amazon, are closing in and picking up customers. It’s true that Pandora was seeing some sales growth, but not enough to protect its foothold in the industry.
Meanwhile, as Pandora struggles to find its audience, rival Spotify seems to be on a totally different trajectory. There’s scuttlebutt that Spotify may be making a run at going public soon, telegraphing an influx of cash that might give the company the resources it needs to gain an edge in the marketplace.
If Pandora wants to keep the race close, the company needs to find a way to gain customers that choose them, rather than flipping back and forth. Exclusive contracts with certain acts may do that. But they’d likely be better served to keep those options open and look at delivering something customers can’t get from other providers.
In this, Pandora could borrow a stratagem from wireless providers. For years, Verizon was the undisputed king. And when their far-back-in-the-pack competition announced industry firsts like unlimited data and flat rate plans, others scoffed. But these PR campaigns allowed the companies to draw closer, peeling off customers from the king of the hill. Maybe Pandora could come up with something that allows them to do the same.
Robert Gillings is an award winning writer, producer, actor architectural designer, philosopher and financial consultant.