SharkJumping

The veteran digital music company formerly known as Savage Beast recently launched a new online radio service called Pandora.  (Note: I have known company founder Tim Westergren for a few years now and spent a little bit of time with the Pandora team during the beta period).  This may seem like an obvious statement, but a radio service differs from an on demand service (e.g. Napster) in that it offers music streams which adhere to a certain algorithm that limits the number of consecutive tracks by an artist or from a certain album within a period of time, but which often still offers a degree of customization and the ability to skip songs.  Unlike an on demand service, a radio service receives an automatic statutory royalty rate rather than having to negotiate deals for every single song, so the rates are lower and you can offer all songs, not just certain ones.

My thoughts on the service are generally positive from a product angle, but mixed from a business perspective.  I admire the fact that they are taking the great core editorial assets they created in Savage Beast and are rolling them into a high quality radio product, similar to what we did at Listen when we moved from an editorial directory model to the Rhapsody music service.  I think the Pandora service is easy to use since it's all Flash based, it offers a high quality MP3 stream, and that it offers a greater degree of customization down to the song level than almost any radio service I know.  The service is free for 10 hours and then requires a $36 annual fee, but it has no commercials.

However, from a business angle, I'm not sure that it addresses the primary issue, which is "Is it Better than Good Enough?".  This means that most enthusiast music consumers have adopted a client-based music service such as Rhapsody, Yahoo Music, Napster or iTunes, which offers them a wide range of features, as well as editorial and radio.  Novice or less experienced music consumers are probably pretty happy with free options from AOL Radio, Launch or MSN Radio, as well as bundled ones such as Comcast Rhapsody Radio.  The strong recommendation features of Pandora and its subscription price tend to aim it at enthusiasts, while the flash-based, low feature nature of the service would seem to aim it at novices, so I think it's stuck between 2 masters. 

However, from my point of view, the most interesting part of the approach is that that Pandora should be a great partner for syndication partners or advertisers who are interested in embedding an easy to use, high quality, radio service into their web pages - e.g. Ford F-150 Country Radio - there are no longer any viable players in this sector, and I'd focus Pandora in that direction since I believe it will be a lucrative one. 

In any case, strong congrats should go to the Pandora team for delivering a high quality music service and for continuing to build on the great work done by the Savage Beast team over the past few years.  Other Pandora overviews are here - http://www.ventureblog.com and http://www.techcrunch.com/?p=167.