Pandora taps former Microsoft exec Brian McAndrews as CEO
Pandora Media has named digital advertising veteran Brian McAndrews as CEO, president and chairman, effective immediately. McAndrews takes over for Joe Kennedy, who announced his resignation in March.
McAndrews first rose to prominence as president and CEO of digital advertising agency Avenue A, which he built into aQuantive, acquired by Microsoft (NASDAQ:MSFT) for $6.3 billion in 2007. He left Microsoft in 2008, resurfacing a year later as venture partner at Madrona Venture Group, where he focused on early-stage technology startups. "No one better understands the intersection of technology and advertising," said Tim Westergren, Pandora's founder and chief strategy officer.
Pandora will look to McAndrews to accelerate its ad sales growth. Last month the streaming music service reported total second quarter revenues of $162 million, a 58 percent year-over-year increase. Mobile revenues surged 92 percent from the second quarter of 2012 to $116 million, with total mobile ad revenues around $90 million.
Active Pandora users reached 71.2 million in the second quarter, up 30 percent from a year ago. Its share of total U.S. radio listening activity climbed to 7.08 percent, increasing from 6.02 percent. Pandora is available across more than 1,000 consumer electronic devices and will be installed in roughly one third of all new automobiles sold in the U.S. this year.
McAndrews must navigate Pandora through an increasingly competitive digital music landscape that includes Apple's (NASDAQ:AAPL) fledgling iTunes Radio, which launches next week. iTunes Radio enables listeners to access more than 200 Apple-curated featured stations or to create their own stations based on favorite artists and songs. Users may also share stations with friends. Any song played through iTunes Radio may be purchased with one click from Apple's iTunes digital storefront, the music business' largest source of digital revenues with an estimated $4.3 billion in download sales in 2012.
McAndrews also must steer efforts to renegotiate the royalty rates Pandora pays to music industry partners. For each song Pandora streams to listeners, it pays a fraction of a penny to record labels; the two sides are scheduled begin negotiations before the federal Copyright Royalty Board in January 2014.
McAndrews told The Associated Press that the royalty battle is "a ways off" but that he's "confident we'll be prepared and do the right thing," adding, "I do share Pandora's longstanding belief that musicians should be fairly compensated for their work." McAndrews said the existing patchwork of music licensing laws was "created piecemeal over decades" and "doesn't serve any one very well."
Pandora dumps 40-hour monthly mobile listening cap thanks to ad sales
BMI sues Pandora, dismisses radio station purchase as 'stunt'
Pandora, Facebook team for music sharing, discovery app
Pandora: Mobile is the biggest platform for us
NPD: Pandora, iHeartRadio top streaming radio usage, fueled by mobile
Pandora expands to Windows Phone 8, vows ad-free music through 2013