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Pandora rocks at SXSW with musical showcase

By Tracy Vu | 19 Mar 2014

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Oakland-based Pandora was back at this year’s South by Southwest (SXSW) Conference and Festival 2014 for the third year in a row with its Pandora Discovery Den.

Pandora Discovery Den, the company’s musical showcase, featured over 35 acts scheduled across a span of four days from March 12 to 15.

Each day centered on a specific genre, including electronic/pop, hip-hop/R&B, Americana and indie rock. The lineup included the likes of Tyler, The Creator, SoMo, Cash Cash, Betty Who and MAGIC!.

“Music discovery has always been at the heart of the Pandora experience,” Pandora Founder Tim Westergren said in a statement. “By bringing that experience to life at SXSW with a diverse lineup of performers at the Discovery Den and through the over 70 million music fans that listen to Pandora every month, we are furthering our mission of helping people discover and enjoy the music they love, while helping artists reach and grow their audiences.”

The announcement came shortly after Pandora released news on Feb. 27 that it reached its milestone of 250 million users in the United States, despite the emergence of new competitors. This represents huge growth, especially because Pandora reported more than 200 million total registered users as of Dec. 31, 2013, in the company’s 10-K for the 2013 fiscal year.

Pandora’s appearance at SXSW is a way for the company to reach out to its growing user base. Rivals, such as iTunes and the new Beats Music, do not have the same reach nor do they have comparable number of users.

A September 2013 report by Triton Digital stated that Pandora has more than 70 percent share of Internet radio among the top 20 U.S. stations and networks, which makes it attractive for advertisers among online radio stations.

Recently, the Media Research Center’s accreditation of Triton’s Webcast Metrics Local, described as a “streaming audio measurement solution,” will finally provide standards to measure local audience metrics between streaming audio and terrestrial radio.

This can be huge in helping Pandora gain more local advertising revenue because it can compare its scale to traditional radio stations, which is where advertisers have typically focused their audio ads. The competition for advertisers is critical for Pandora to offset acquisition costs that made up 48 percent of revenue in 2013, compared to broadcast radio that pays no royalties for terrestrial use of sound recordings.

For fans that could not attend SXSW, Pandora offered the Discovery Den experience online through a live audio stream on tablet, mobile and web platforms. For a chance to hear exclusive interviews from SXSW, fans can tune back to the stream on March 24, 2014. For now, the site offers videos from the event as well as mixtapes of different genres for the Discovery Den.

The company said online streaming of the event through multiple platforms would give Pandora the opportunity to reach out to millions of its users. The company’s 2013 10-K reports that as of December 31, 2013, around 175 million registered users have accessed Pandora through smartphones and tablets.

However, the Discovery Den wasn’t the only appearance Pandora had at SXSW. Representatives from Pandora, including top management, were featured panelists. For example, Pandora’s Head of Music Partnerships Tommy Page spoke about the current state and future of Internet radio at “Internet Radio is on Top Again. Why?” on March 12. Chief Financial Officer Mike Herring discussed compensation issues facing musicians across different listening platforms at “Will Artists Make Money on Big Music Platforms” scheduled on that same day. Festival-goers interested in the heated debate over royalties were able to head over to “Compulsory License and Online Music” on March 13, to listen to Pandora’s Assistant General Counsel Chris Harrison.

Pandora’s presence at SXSW isn’t the first time that it has participated in live events this year.

On Jan. 26, the company partnered with StubHub to host a live, personalized concert in Los Angeles featuring Adrian Lux for a select group of fans. Pandora is able to match music preferences of local listeners by looking at data of stations created and “thumbed-up” songs. Invitations were extended to Pandora listeners in the Los Angeles area who added an Adrian Lux station on Pandora.

Before that, on Jan. 31, Pandora held a Pandora Presents Event, part of a series of live, personalized concerts, as part of the Bud Light Hotel concert lineup during the Super Bowl weekend. The event featured Imagine Dragons and was free to fans, thanks to a partnership with Under Armour. Similar to the Adrian Lux after-party, event goers had to be extended an invitation.

Live events put on by Pandora appear to be a strategic way for the company to encourage fans to continue using its online radio services, as well as enabling it to build a stronger brand by aligning itself with big-name musicians.

This type of corporate sponsorship and alignment with big labels seem to be counter to the goal of Pandora’s Discovery Den, which is to ultimately allow fans to discover lesser-known bands. SXSW also claims on its website that it is “the premier destination for discovery.”

However, SXSW has been criticized this year for its heavy corporate sponsorship. The New York Times’ David Carr, in particular, noted in his article “A New Model for music: Big Bands, Big Brands” that “at this year’s festival, historically a place of artistic idiosyncrasy, music labels were an afterthought and big brands owned the joint … the conference’s legacy as a place where baby bands played their little hearts out to be discovered seemed quaint in a week in which Jay-Z and Kanye West kicked it for Samsung, Coldplay headlined for Apple’s iTunes, and Tyler, the Creator played a showcase for Pandora.”

Carr attributes this “new order” to the decline in CD and MP3 sales when music streaming became more popular. As a result, musicians have become dependent on corporate sponsorship. While many may lament this, this new order can work out to Pandora’s advantage.

Homepage composite image: SXSW logo screenshot via http://sxsw.com/music ; Pandora logo courtesy of Pandora Media, Inc.

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