Tim Westergren

Cofounder of Pandora

• Born: December 21, 1965
• Place of Birth: Minneapolis, Minnesota

Introduction

Tim Westergren is a former rock and jazz musician who is best known as the cofounder of Pandora, a service that assists users in creating their own radio stations streaming online. A record producer with decades of experience, Westergren is also an award-winning composer and an accomplished pianist, and plays the bassoon, drums, and clarinet as well. He has managed artists and scored feature films. In 1999, Westergren and Will Glaser devised the Music Genome Project, a typology for categorizing a piece of music according to almost two thousand traits. The Music Genome Project, which is updated continually, is the base upon which Westergren built Pandora.

Early Life

Timothy Brooks Westergren was born December 21, 1965, in Minneapolis, Minnesota. He lived abroad as a child but returned to the United States as he entered his teens. His family moved to Michigan and California, but Westergren would later considere Minneapolis, where he had extended family, home. He was seven when he was introduced to the piano. It was the beginning of a lifelong passion for music. In 1984, he graduated from Cranbrook Schools, a private college preparatory boarding school in Bloomfield Hills, Michigan. He studied music theory and composition at Stanford University, but Westergren admits that he spent most of his time at the Center for Research in Musical Acoustics, a campus think tank focused on the integration of computers and music. After receiving his bachelor's degree from Stanford in 1988, he played piano with a series of acoustic rock bands—Late Coffee and Oranges, Barefoot, and Yellowwood Junction—but by 1995 he was weary of living in a van or in friends' basements and frustrated with the bands' failure to win significant attention.

Westergren found work composing scores for low-budget, independent films. To help him compose, he asked directors to describe the sounds they were looking for, and he would take their often vague descriptions (such as "scary" or "happy") and translate them into rhythm and melody. He was doing film work when he read an article about Aimee Mann, a singer-songwriter whose record company would not release her current album despite respectable sales and critical acclaim for two earlier albums. Mann's story awakened Westergren's resentment about the history of Yellowwood Junction. The ideas he had been mulling over—about a musical database organized by musical characteristic that would enable listeners to find the music they wanted and his conviction that there had to be a better way for good musicians to find their audiences—synthesized.

Life's Work

Westergren thought music could be analyzed by trained musicians who would examine melody, harmony, instrumentation, rhythm, vocals, lyrics, and so on. Once a song was analyzed, the results could be used to find other songs with characteristics from the same "family." He gave the idea a name, the Music Genome Project, playing off the name for the concurrent Human Genome Project, which was then mapping the human genome, and developed a list of about six hundred musical qualities. Westergren also had the right friends. Jon Kraft had already started and sold a technology company, and Will Glaser had the necessary technological knowledge. Kraft drew up a business plan, Glaser worked on the software, and Westergren worked on the music. They hired a musicologist to polish the idea.

In 1999, the three raised $1.5 million from angel investors and started Savage Beast Technologies. At first, they sold music recommendation services to companies like electronics retailer Best Buy. However, by 2001 the company was broke. Its fifty employees were not getting paid regularly, and investors, scarred by the bursting of the dot-com bubble, were not interested. In late 2003, four former employees sued Pandora for deferring salaries. Westergren argued his case before the California Division of Labor Standards. It took most of his money to settle with the former employees. He dismissed his current employees, although some loyalists remained without pay. Westergren was desperate enough to consider taking his last $25,000 to Las Vegas in an attempt to increase his funds.

In March 2004, Westergren made one more pitch to a prospective backer, his 348th. However, this time the pitch was, if not perfect, at least good enough to keep the backer, venture capitalist Larry Marcus, listening. Marcus, a musician himself, led a $9 million investment. Westergren took $2 million to pay the back salaries of his loyal staff. Next, he made changes. The company would focus on consumers rather than businesses, and it would be called Pandora. He also yielded his position as chief executive officer (CEO) to Joe Kennedy, who brought experience at building consumer products to the job. Pandora launched in September 2005 and sold its first ad in December.

In the beginning, Pandora offered listeners ten free hours of streaming content, with higher use requiring a paid subscription. When some users avoided the fee by logging in with different e-mail addresses, Westergren decided to move to a free service and depend on advertisers for revenue. Because Pandora could offer segmented audiences, advertisers were pleased. The number of listeners was doubling monthly. Investors liked the changes and gave the company another $12 million. However, Westergren and his partners had only a brief span to enjoy success before a new problem arose that threatened to mean the end of Pandora.

On May 1, 2007, the Copyright Royalty Board changed the amounts that Internet radio stations had to pay, switching from a fee charged per listener per hour to one charged per listener per song. The change would almost triple Pandora's costs. To this increase would be added a new charge of $500 a year per individual station. For Pandora, with each of its millions of listeners having a personalized “station,” the costs would be devastating. Westergren and Kennedy considered shutting down immediately. Instead, Pandora hired a lobbyist in Washington and appealed to listeners to contact their congressional representatives. Because of Westergren's habit of meeting with listeners in groups ranging from fewer than ten to several hundred during his travels to look for new music, Pandora's connection to its listeners was closer to star-fan bond than to radio station-listener connection. Westergren sent an e-mail to all Pandora listeners, identifying their congressional representatives and senators and asking that they write to them. The result, according to Westergren's estimate, was about one million e-mails, phone calls, or faxes. California Democratic senator Dianne Feinstein alone received twenty-five thousand e-mails. The Copyright Royalty Board agreed to negotiations, and although it took two years, the board eventually settled on a lower rate of increase. Even with the adjustment, Pandora's costs doubled, but the company stayed in business.

At the same time that Westergren was rallying the troops politically, the company was prospering. In 2008, Pandora added thirty-five thousand new users in a single day when it offered an iPhone application that made it possible to stream music. By 2010, 15 million people had the Pandora app on their iPhones. Pandora was also finding ways to work more directly with artists and provide listeners with original content. In 2010, the Dave Matthews Band hosted a listening party on Pandora, sponsored by Brita. Soon other artists were viewing Pandora as a way to boost sales and sell concert tickets. In 2011, Ford announced that Pandora would be included in its voice-activated Sync system, and there were also deals to make Pandora-capable after-market car stereos from Pioneer and Alpine. Consumer electronics companies began integrating Pandora into Blu-ray players, televisions, and music systems.

Pandora's biggest news in 2011 came on June 15, when the company officially began trading on the New York Stock Exchange at a price of $16 per share, giving Pandora a valuation of nearly $2.6 billion. In 2012, the company announced that it had more than 150 million registered users, making Pandora one of the most heavily used Internet sites in the United States. The hours listeners spent on Pandora increased 87 percent from one year before, and Pandora became the second most downloaded iPhone application of all time. In 2011 Pandora held a 68 percent market share of Internet radio listening, according to Triton Media. Still, Westergren dreamed of seeing Pandora become an international company.

Pandora's success quickly made it a target for other tech and media companies, and the 2010s saw a steep rise in competition. Many other music streaming services appeared, some with a similar radio station model and some giving users more direct control over what music to play. Among the most prominent competitors were Apple Music, released by tech giant Apple, and Google Play Music, from the ubiquitous search engine company Google. Prime Music by online retailer Amazon and the privately held streaming service Spotify were also competitors. Facing these challengers, Pandora's user growth and engagement slowed, and the company's stock price began to decline. As Pandora's stock dropped by 40 percent from 2015 to 2016, rumors swirled that the company might be bought out.

While buyout rumors persisted, change came to Pandora when Westergren returned to the CEO position in March 2016, replacing Brian McAndrews. In a statement announcing the move, Westergren outlined plans to further grow the company and profoundly influence not only consumers' discovery of music, but also the way musicians shape their careers. He made much effort to improve relations with major content providers, such as Sony Music and Universal music Group. Meanwhile, the Copyright Royalty Board again raised rates for payment to artists and labels, increasing Pandora's costs. Later in 2016 Pandora unveiled two subscription services: Pandora Plus, an enhanced version of its radio platform (replacing the earlier Pandora One service), and Pandora Premium, meant to compete more directly with other streaming outlets by allowing direct user selection of songs. However, the number of active users continued to decline as Spotify and Apple Music dominated music streaming, both with a global reach that Pandora still lacked.

In May 2017, Pandora secured $150 million in financing, and a month later struck a $480 million deal with satellite radio company SiriusXM. Though not a full buyout, SiriusXM took control of 19 percent of the company's stock and had three members appointed to its board. Despite these investments, in late June 2017 Westergren announced that he would step away from the company he helped found, resigning both from his CEO position and the board of directors. With no successor planned, Pandora CFO Naveen Chopra became the interim CEO, among other leadership changes. In his exit statement, Westergren voiced his belief that Pandora was poised to begin a new chapter. In early 2019, SiriusXM officially closed a deal in which it acquired Pandora for $3.5 billion.

In 2020, during the global COVID-19 pandemic, Westergren embarked upon a new venture. He launched Sessions, a live streaming platform, to allow artists to charge fans for live-streamed performances. Many artists welcomed the idea because many venues where they typically performed were closed for months. The idea for Sessions predated the pandemic, Westergren noted, but the global emergency prompted developers to roll it out more quickly. Beyond the immediate need during the pandemic, the developers saw Sessions as a way for artists to elimated costs such as travel and accommodations while still getting paid to perform. It also was devised to help fans of an artist to find other performers they would probably also like.

Personal Life

Westergren was one of Time magazine's 100 Most Influential People in the World in 2010. Even at the height of Pandora's popularity, he spent about one hundred days a year on the road in the United States, researching new music and talking to Pandora's listeners. He depended on those listeners to tell him the best places to stay, to recommend the best restaurants, and to steer him to the right places to hear live music. The music was the most important to him, personally and professionally. He was a music lover from childhood and trained as a jazz musician. Tenor saxophonist Stan Getz was one of his professors at Stanford. Except for Prince and his album Purple Rain, Westergren paid little attention to rock music until his college years. However, those years provided an education in rock along with more formal learning, and he spent the decade after college on the road playing in a rock band.

Two of Westergren's reputed favorite spots to add to his store of music knowledge were Grimey's in Nashville, an independent record store named as one of the best in the United States by Rolling Stone magazine in 2011, and the music scene in Denton, Texas, where the University of North Texas, which graduates the most professional musicians of any college in the United States, is located. His personal Pandora stations were known to often be based on artists like Muddy Waters, Ben Folds, Josh Fix, Oscar Peterson, Art Farmer, Elvis Costello, and James Taylor.

Bibliography

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Copeland, Michael V. “Pandora's Founder Rocks the Music Biz.” Fortune 5 July 2010: 27–28. Print.

Flanagan, Andrew. "How Is Pandora Doing? Well, It's Tough Out There." NPR, 9 May 2017, www.npr.org/sections/therecord/2017/05/09/527618431/how-is-pandora-doing-well-its-tough-out-there. Accessed 13 July 2017.

Flanagan, Andrew. "Pandora Co-Founder and CEO Tim Westergren to Step Down." NPR, 27 June 2017, www.npr.org/sections/therecord/2017/06/27/534542303/pandora-co-founder-and-ceo-tim-westergren-to-step-down. Accessed 13 July 2017.

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Levenson, Eugenia. “Road Warrior.” Fortune 26 May 2008: 59. Print.

Middleton, Ryan. "Industry Insider: Pandora Founder Tim Westergren on New Company Sessions, How Artists Can Make Real Money from Live Streaming." Magnetic Magazine, 14 Sept. 2020, www.magneticmag.com/2020/09/industry-insider-interview-tim-westergren/. Accessed 8 Mar. 2024.

Miller, Claire Cain. “How Pandora Slipped Past the Junkyard.” New York Times 8 Mar. 2010: B1. Print.

Westergren, Tim. “Tim Westergren, Interviewed February 24, 2009.” Interview by Bill Moggridge. Designing Media. Cambridge: MIT, 2010. 131–46. Print.