The Washington Post

Pandora focuses on cars

Joe Kennedy, third from left, chief executive officer & president, and Tim Westergren, fourth from left, chief strategy officer and founder of Pandora Internet radio, ring the NYSE opening bell to celebrate their company's IPO at the New York Stock Exchange on June 15, 2011. (AP Photo/Richard Drew) (Richard Drew/AP)

At the Consumer Electronics Show, Westergren announced deals with 16 car makers— from the first partner, Ford, to latest partner Kia— to incorporate Pandora into car dashboards or allow users to stream the service through their smartphones into car audio systems.
It's part of the firm's strategy to get its 125 million users to bring the service with them wherever they go and get them to listen even longer. The free service is so far supported by advertising, but ad revenues need to grow to to keep that model going, analysts say. Only 10 percent of customers use its premium paid service.

"It's one of those things where you have to build a big audience first and then advertising catches up," Westergren said in an interview at the company's suite at the Wynn Hotel here. 

But he said many partners see Pandora as an essential brand for their products. The app was among the top downloaded on tablets like the iPad last year. Roku, an Internet television service, features Pandora as one of three buttons on its remote control for highly demanded apps.

On the show floor, Ford, Mercedes-Benz and Toyota were among firms touting the service on their dashboards. Not long ago, those car makers couldn't see the value in teaming up with the Web service.

The company follows satellite service XM Radio, which has benefited from car buyers seeking alternatives to regular radio broadcast. But it's also tied its fortunes tightly to the ups and downs of the auto market. 

For this public transportation co-founder, could that also be a risk?

“We don't have a huge amount of hardware and per car costs like satellite radio does. Cars are just one piece. A big one, but just one piece for us,” Westergren said.

Cecilia Kang is a senior technology correspondent for The Washington Post.



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