Case study Pandora Media

Pandora is an online music streaming service designed to help find and enjoy music that one will love. It is powered by the Music Genome Project, which is a comprehensive analysis of music (Source: FAQ). The inspiration for the company came from the experiences of the founder as being a musician. The company was founded to help musicians find their audiences and to make a living out of their craft.

The Music Genome Project started in January 2000 by a group of 35 trained musicians with the idea to create the most comprehensive analysis of music ever (Source: ZDNET). They set out to capture the essence of music at the most fundamental level. They ended up assembling literally hundreds of musical attributes or ‘genes’ into a very large Music Genome. Taken together, these genes capture the unique and magical musical identity of a song, which can be compared to DNA. That includes everything from melody, harmony and rhythm, to instrumentation, orchestration, arrangement, lyrics, and the rich world of singing and vocal harmony. It is not about what a band looks like, or what genre they supposedly belong to, or about who buys their records; it is about what each individual song sounds like. Over the past six years, they have carefully listened to the songs of over 20,000 different artists, ranging from popular to obscure, and analyzed the musical qualities of each song one attribute at a time (Source: MGP).

Since November 2005, Pandora started with the service they now provide to everybody. More than three million people have signed up since (Source: NYT). On Pandora, all is based on the actual quality of the song. That does not take into account whether a group of people think of one particular band fitting into one genre, or if a radio station plays one particular song because the record label wants them to play it, it is all about what the actual musical qualities are. It is really unique in that respect.

Pandora is included in this research because one of their objectives is to find an audience for their large catalogue of music, whether it is obscure or popular. Their approach of music discovery is interesting for this research, because it is different from Last.fm. Where Last.fm is socially driven, Pandora is driven by trained musical analysts, who classify music first before it can be listened to on the radio.

Data sources

The primary data sources for the Pandora case study are two interviews with Pandora employees. The first interviewee was Matt Nichols, marketing manager of Pandora. The second was Tim Westergren, founder of the Music Genome Project and Pandora. Both interviews were held during a Skype session and recorded with permission. Afterwards the recorded interviews were transcribed literally and sent to the interviewees for a review. Other data sources are documentation and archived records from the Pandora website and from previous interviews found on the Internet. A list of specific reference material can be found at paragraph 4.4.

Mass customization classification

Pandora can be classified as an involver in terms of the mass customization configuration, see Table 4.8. The earliest point of consumer involvement is during the design and fabrication stages, while the type of modularity employed is present in the assembly and use stages. The point of consumer involvement is primarily determined by the fact that consumers’ requests are uniquely designed into the finished product, and each consumer order is a unique design. The type of modularity employed is primarily determined by the fact that options can be added to a standard product, components are shared across products, products are designed around a common core technology, and products have interchangeable features and options.

 

Group

Modularity

Consumer involvement

Design / fabrication

Assembly / use

Design / fabrication

Assembly / use

1. Fabricators

+

±

+

±

2. Involvers

+

+

±

3. Modularizers

+

±

+

4. Assemblers

+

+

 

Table 4.8: Classification of the mass customization configuration.

Consumer involvement
The earliest point that consumers of Pandora are involved is during the design and fabrication stages. Consumers’ requests are uniquely designed into the finished product, and each consumer order requires a unique design. In the remaining stages of the production cycle, the consumers are still involved, because each consumer order is assembled from components in stock. This section provides proof for the consumers’ involvement for these factors.

Consumers’ requests are uniquely designed into the finished product. When a consumer gives feedback to the system, the number of songs that can be played on the radio station can be increased.

“When you create a station and you give it feedback, it opens up a whole new number of songs you can play on that station. It makes stations fluid, and truly listeners based. Every time a listener says I like this song, increases the number of songs, I don’t know the exact number, but it increases the number of songs by at least dozens. So by making the stations truly customizable and by providing an interface that works easy for a user to add new music and say ‘I like it’, that increases the amount of music that will play on that station.”

If two different songs from a particular artist will be marked as ‘thumbs down’, it will ban the artist from the station. However, if at any time you gave this artist a ‘thumbs up’, that artist will not be banned (Source: FAQ).

Each consumer order requires a unique design. Every product, or radio station, is different from every other available product. All radio stations are dynamic; a particular radio station based on just a single artist contains a different playlist every time the station is launched. No two stations are the same.

Each consumer order is assembled from components in stock. Pandora adds about 8,000 songs each month, and has about 400,000 songs stocked from 20,000 different artists. Each radio station created and influenced by the consumers is assembled from that stock. Consumers are not able to specify new product features.

Table 4.9 gives an overview of all the consumer involvement factors of Duray et al. (2000) that are the case at Pandora.

 

Consumer involvement factor

Stage in production cycle

Consumer’s request are uniquely designed into the finished product

Design / fabrication

Each consumer order requires a unique design

Design / fabrication

Each consumer order is assembled from components in stock

Assembly / use

 

Table 4.9: Overview consumer involvement factors Pandora.

Type of modularity employed
The type of modularity that is employed is through standardization, in the form of adding options to standard products or interchangeability of components. The modularity factors that apply to Pandora are that options can be added to a standard product, components are shared across products, products are designed around a common core technology, and products have interchangeable features and options. This section gives examples of these factors. This section also explains which modularity type of Ulrich and Tsung (1991, in Pine, 1993) can be applied to Pandora.

Options can be added to a standard product. When a consumer listens to music at Pandora, tracks are automatically being added to the radio station, the standard product. It depends partly on the availability of tracks for the radio station how many different tracks that will be, and partly on the feedback that the consumer gives to Pandora. The consumer is not able to manually add particular tracks to the radio station that he or she is listening to, but can influence the selection mechanism by giving feedback about the track that is being listened, or by specifying artists or tracks to be added to the customized radio station. The musical genome of these specified artists or tracks is used to add more music to the station. Feedback can be given in the form of just listening through the complete track, skipping a track, banning a track for a month, and liking or disliking a song by giving it ‘thumbs up’ or ‘thumbs down’.
Components are shared across products, but not across all products. Because tracks are based on genomes, it is not possible for a particular track to be found in the same station with another track that is totally different in terms of the genome. Tracks should be musical neighbours in terms of the musical genome.

Products are designed around a common core technology. The common core technology that Pandora uses is the Internet and a browser that is capable of playing Flash movies. The Internet is a common network for all consumers and the Flash player is a common technology for browsers. On this technology or platform, it is possible to add every available track, the digital product, to the platform.

Products have interchangeable features and options. Modules or tracks that were added to a radio station by the system can be moved to another station that a consumer has created earlier.

 

Modularity factor

Stage in production cycle

Options can be added to a standard product

Assembly / use

Components are shared across products

Assembly / use

Products are designed around a common core technology

Assembly / use

Products have interchangeable features and options

Assembly / use

 

Table 4.10: Overview modularity factors Pandora.

All the above factors point to bus modularity, see Figure 2.2 in Chapter 2. It is the ability to add a module to existing series, when one or more modules are added to an existing base (Ulrich and Tsung, 1991, in Pine, 1993). It can be compared to track lightning or the Universal Serial Bus (USB). Table 4.10 gives an overview of all the modularity factors of Duray et al. (2000) that are the case at Pandora.

Pandora can be classified as an involver in terms of the mass customization classification of Duray et al. (2000). Consumers are involved in the design and fabrication stages of the production cycle, and the modularity type they employ is during the assembly and use stages. Listeners, or consumers, make use of unique products that consists of components that are shared around other unique products.

Possible variety

The possible external variety that Pandora offers can be considered as high. The possible variety is positively influenced by the multiple usages of modules, an interface that is not complex for the consumers and a platform that is efficient. At Pandora, all three factors that influence the possible variety, influences the possible variety in a positive manner. Table 4.11 summarizes these influences. The minus sign at the second column indicates that the interface is not complex.

To measure variety according to the metrics used in this research, some assumptions should be met first (Blecker et al., 2006). The first assumption is that the product family is built around platforms and modules. This assumption is met by the identified modularity factors. The second assumption is that the interaction process is carried out over the Internet, so that the consumer is involved in the production process. This assumption is also met. The third assumption is that the mass customizer has not implemented a cost calculation system that enables one to accurately evaluate the costs triggered by variety induced complexity. The implementation of a cost calculation system could not be identified, resulting in meeting all assumptions.

 

Possible variety factor

Influences Pandora

Multiple use

+

Interface complexity

Platform efficiency

+

 

Table 4.11: Overview of possible variety influences at Pandora.

At Pandora, the tracks are the modules, or the used components of the digital product. The tracks are shared across different radio stations. It is not exactly known how many songs are being listened to each day, but according to Pandora it is are many songs. It is known that over 90 percent of the music that has been analyzed is being listened to. In May 2006 there were sixteen million different stations created out of the 400,000 available tracks since launch in August 2005.

“We’re adding about 8,000 songs a month that’s the first thing so we’re constantly adding new music. And the second thing is, when you create a station on Pandora, we essentially take that song that you’ve started with or an artist, and create a station that is almost infinitely long, and over time, and this is a work in progress, we will do things to shuffle and change that playlist so you’re getting a steady supply of new music and fewer repeats unless you really want that. So you’re going to be introduced to a lot of new music. […] You never hear the same playlist twice on Pandora.”

Not all tracks are shared. Some tracks cannot be played on a particular radio station because of the musical genome, which can be too different. Each track has been analyzed by professional musicians, and they analyze according to a specific genome that they choose that matches the musical qualities of the track.

“Every song is analyzed on every gene in that genome. We have a couple of different genomes though, so there’s a little bit of variation between like jazz and electronical for example and rap, so rap has a few extra genes in lyrics which jazz doesn’t have, so there is some variation. But they all get analyzed on the whole gene. […] Well, those are pretty set, so when an analyst picks… the system picks which genome it should be in and then all the genes are already laid out there. So once you pick the genome, the analyst analyzes every gene.”

Tracks have to be musical neighbours to be present on the same station. Providing feedback however, increases the amount of tracks that can be played on a radio station. Consumers can put as many songs or artists as the seed for a station as they like. That will create variety. The 400,000 tracks that are offered on Pandora do not include all genres yet. For now, only music with English lyrics is available, but Pandora is working on adding Latin and Spanish music for example.

“We are pushing out Latin music soon. So that’s a big thing coming out you know. A big challenge for us is making this service available internationally and include international music, because right now it’s English only. I think a service like this is reaching potential when we’re international, when we’re doing music from all over the world, connecting people across continents.”

The interface of the Pandora player is not complex. To start using Pandora, it is only needed to enter the name of an artist or song as a seed and a radio station is created based on the musical genome of that artist or song. For every station it is possible to see what the station is based upon and why it is playing, since it is possible to add artists and tracks to a station. Every track that has been marked as liked or disliked by clicking on ‘thumbs up’ or ‘thumbs down’ on the player can be reviewed. For every track that is playing or has been listened to during the listening session, it is possible to go to a specific page for the artist, album or track on the Pandora website. It is possible to create a new station from a track or artist that has been listened to instantly, to bookmark the track or artist, or to buy it from Amazon or iTunes. Other possibilities on the player are to add stations to a mixed station that plays tracks from different stations after each other.

“So, there are a handful of things that we present right now in terms of information, so you’ve seen the little window that’ll come up that is saying this song is matching because of this and we give a little bit of musical detail. So that’s one thing. You can also link on your personal favourite’s page to the all music guide, that gives background information of the artist, and we’re going to add more of that in over time. Those are the two primary things.”

Pandora tries to provide its service on other devices as well. It is possible to use the service on stand-alone devices with a remote control to listen to the stations or create new stations, which makes the service more accessible for some people. This is made possible because Pandora allied with a third party, called Slim Devices.

The platform that Pandora uses can be considered as efficient. The mentioned common core technology makes it very efficient; no installation of a client program is needed, an Internet browser is sufficient. The available tracks are ready to be added when they are being analyzed by the musicians. Within a week after analysis, a track can be listened to on the radio stations. It is easy to derive new products of the platform, just by creating a new station from a track or artists that has come by.

“The amazing thing that the Internet does, you can do different things for individual persons you know. And it’s just using computer power. That’s all, and that is very cheap.”

Complexity and search costs

The analysis of complexity and search costs is divided in three parts. First, the perceived complexity will be analyzed, followed by the search costs and how perceived complexity is being reduced in the case of Pandora in terms of customization.

Perceived complexity
The perceived complexity can be considered as high and low at the same time. The time that a listener takes to completely configure a product variant can vary from consumer to consumer. Pandora tries to support all consumers. The abortion rate at Pandora is high and low at the same time, because there are reasons why consumers abort. Table 4.12 gives an overview of the perceived complexity factors at Pandora.

 

Perceived complexity factor

Influences Pandora

Average interaction length of time

+/-

Abortion rate

+/-

 

Table 4.12: Overview of perceived complexity factor influences at Pandora.

Pandora tries to make the service as simple as possible, but at the same time tries to interact as much as possible with their consumers. One of the company’s goals is to increase the amount of time that consumers interact with the platform, and to let them come back over and over again. They encourage repeat listeners.

“In terms of making it easy, that was our number one tenet of this project. I think what is being unique about Pandora is that you can enter one song, or one artist, that’s all you need to give it. So it’s very easy, so that is an unusual easy way to craft a station of music. It’s really focused around music that you like.”

On average, every sixth or seventh track that a consumer listens to is getting feedback from the consumer. That feedback can be in the forms mentioned such as ‘thumbs up’ or ‘thumbs down’, which is the most given feedback, to new stations. The average listening session for a new listener lasts for about two hours; it grows a little bit longer to three to four hours for a repeat listener. A lot of visitors do not give feedback at all, they just type in a song and let the station run, other listeners give a lot of feedback and like to create stations that are very diverse and are based on different artists, so it really depends on the listener. This kind of flexibility is what Pandora is after.

“There are some people who don’t quite get it, but we think that it’s a pretty simple interface, most of our listeners find it easy to use, honestly one of the bigger problems is our repeat users who don’t have broadband, who don’t have high-speed Internet connections, so I think that’s one of the main reasons why people come to the site and just leave immediately. Two of our biggest complaints are people who are looking for a song on demand, so people who come to the site and type in a song and expect to hear that song, or type in an artist and expect to hear just that artist, so we try to explain that’s not what Pandora is, that is not how we work, but that’s one of the complaints we get. The other things we get are people who type in a specific song, and want to hear just that song, which isn’t what we do. There’s a whole different set of licensing costs, of regulations around how many songs we can play by a specific artist in a specific time period and if we can play a song on demand. So the main reasons for consumers to leave are the lack of broadband speed and the song on demand issue of hearing just that artist. Some of the issues that we try to communicate with the customer are what we’re doing, what Pandora is, and what it isn’t.”

Data on consumers that leave the service during interaction is not available. The sample size or study group that Pandora has is a little bit biased, because they generally only hear from consumers that are using the service. Not every consumer becomes a long-term consumer, but the company has been praised for the simplicity of their service. Pandora does not know about the people who are quitting their service because they find it too difficult to use.

“We have done a fair number of studies as watching people use it, seeing who they interact with it, it seems like it is fairly easy to use, that’s not the biggest hurdle.”

A reason why some people leave is because Pandora does not have classical music yet. Framework 4.3 explains the vision of one of the interviewees on the abortion rate, and how Pandora deals with it.

Search costs
The search costs for consumers at Pandora can be considered as acceptable. Given that the data about consumers is not extensive and empirical data from consumers or users of Pandora is not available, it is not easy to measure search costs very thoroughly. It is more important for Pandora to let consumers discover music that they will like, but is unknown to them. The number of alternatives searched can be considered as high, which negatively influences search costs for consumers. The product accuracy is good, and search agents are available but not the primary way to find desired products. An overview is given in Table 4.13.

The number of alternatives searched is difficult to measure. Consumers can influence radio stations all the time, depending on what they would like to listen to at that moment. Because digital products have to be experienced in order to determine its value, it is difficult to measure. Pandora does not try to decrease the number of alternatives searched. It is quite the contrary, they would like consumers to keep searching or to discover new music.

 

Search costs factor

Influences Pandora

Number of alternatives searched

Product accuracy

+

Search agents

 

Table 4.13: Overview of search costs factors influences at Pandora.

The accuracy of the product can be considered as good. The music that is being served is always based on the musical qualities of the tracks, based on the musical genome. The musical qualities are defined by trained musicians, but Pandora admits that it can be wrong on these definitions.

“And then in terms of discovering new music, when we make a playlist for you, there is no bias in the playlist towards more or less popular music, so you’re just as likely to hit something that is well known or not well known there’s no kind of bias towards popularity. So that means that if you enter a well known artist, you’re increasingly likely that with every passing day, because we’re doing more and more independent music compared to major label music, to hear something that you haven’t heard before. So the new music that we’re analyzing, the majority of it is lesser known music.”

“I think that Pandora is kind of emblematic of how the Internet has allowed people to really get information and indulge in a lot of advertorial things. If you take the example of eBay, I think Pandora is kind of analogous to that. In the past if a consumer in the eBay example wanted to buy obscure nineteen century porcelain dolls or something, somebody would have to go out and find one store in the country or overseas that may be specialized in these things. Now with the Internet it brought that marketplace to everybody. I think the same thing is the case for Pandora. In the past if somebody was into an obscure punk rock band from Washington DC that played in the 1970’s, to find their records they would have to go either on some kind of fan mailing list or they’ll have to go to some place which is specialized in that, only present in major media places like Los Angeles or Chicago or San Francisco, but now with Pandora it has really allowed people have a central place where they can indulge in music that they enjoy easily. As obscure as it is, Pandora will let you home in on a particular song that you like without a lot of effort. I think that that is kind of… you know if you talk about search costs the amount of time it takes to go to a record store and research which record store carries this particular obscure artists, is significant compared to on Pandora typing in the name of a song or an artist. I think that we’re analogous to an eBay in that respect, Pandora provides a great dis-aggregation of a huge musical catalogue.”

It is possible to present the consumer with unknown music because of a broad music catalogue. By playing music that is similar to very obscure songs it is possible to discover new music while the accuracy of the searched product stays good. To let the consumer discover new music is why the company exists, and it does it by presenting music, known or unknown, that matches the musical genome of the radio station.

“I believe personally that that’s what makes people fall in love with music and stay in love with music. I think the reason most people loose their affection for music is because they get tired of hearing the same stuff over and over again. And that’s sucks the light out of people”

The website of Pandora lets consumers search for artists and songs. The search results consist of a biography of the artist, some selected albums of the artist and a list of similar artists. Framework 4.4 explains how the search costs for consumers on Pandora are being minimized.

Reduce perceived complexity
Pandora offers various strategies to reduce the perceived complexity for consumers. The selection mechanism makes use of selecting by attribute rather than by alternative, and consumer expertise is increased. In addition automatic as well as direct recommendations are made, and trust building and collaborative co-design is supported, see Table 4.14.

 

Reduce perceived complexity factor

Influences Pandora

Attribute vs. alternative

+

Default version

Consumer expertise

+

Automatic recommendation

+

Direct recommendation

+

Trust building

+

Collaborative co-design

+

 

Table 4.14: Reduce perceived complexity, or customization metrics.

Pandora presents their products by attribute instead of by alternative. Tracks are being presented by their musical qualities, based on their genome.

“Every song gets analyzed along every gene in the genome. Essentially those are 400 genes. Every gene that has a score, and those genes essentially cover all of the details of the song, so it’s melody and harmony and rhythm and instrumentation and compositional form and vocal performance and lyrics, it’s all of the individual segments, and with anyone of those segments like instrumentation will capture every instrument that is playing and what that instrument is doing, and so when you essentially have the musical equivalent of a DNA, and then each one of those genes has a weight, like an importance level. And then you essentially calculate distance, then it becomes a big mathematical equation. It’s really about musical information and what the software does, it looks at that songs’ DNA and calculates how close everything else is to it by looking at the score and the weight.”

The product is based on the musical genomes, which consists of specific genomes that can be compared to attributes. However, it is not possible to create the product based on these attributes directly. Indirectly they are, because the product is based on tracks and artists that have similar musical genomes.

Pandora does not make use of default versions of radio stations. The process of listening to music is dynamic for every consumer. Radio stations that are based on the same track or artist have different playlists for every consumer and are different every time the radio station is started. There are popular radio stations based on top artists, but there are no default versions available.

Pandora offers possibilities to increase consumer expertise. The most important is the feedback that the radio player provides on why a particular track is being played.

“Well, I think that when a user says ‘Why is the song playing’, the information that we give them is an abridge summary of why the song is playing, it’ll list four-five reasons of why, where in reality there are hundreds of musical genes that go in to it, so what we’ll display to the user is kind of an abridge summary of why the song is playing. […] We’re going to get much more detail around that eventually so… we’re allowing someone a lot more kind of look into the genome. Right now it’s pretty surface you know, it’s a very cursory look at the details.”

Pandora makes use of automatic as well as direct recommendations. Automatic recommendations are being made by email. New tracks are constantly being added to Pandora, and when more variety is added to a particular station that is created and is being listened to recently, Pandora sends out an e-mail that lists some new tracks that are added to that station.

“I think that listeners always want more variety and basically are continuing analyzing music and we’re continually adding new music to the project so for instance if you have a given station, we’re constantly are adding new music to that station and one of the things that I do with the email marketing stuff, the personalized emails is that we send out an email once or twice a month to listeners that lets them know that there is new music that we’ve added to their stations. So lets say that someone comes in and they start a station, over the next few months we’re constantly analyzing new music, some of which will play on that station, we’ll email that listener and say ‘hey we’ve added new music to your station, here are the songs, come and listen and eventually you’ll hear the new songs’, and listeners really reacted strongly to that, it is a nice reminder for them to back and check out Pandora and it lets them know that we’re constantly adding music”

Direct recommendations can be made by consumers themselves. On the player there is the possibility to share a particular station with someone else, by sending an e-mail out to a friend and recommend a particular station that way.

Trust or reducing risk is achieved by various strategies. Pandora sometimes uses surveys to ask people what they like and what they do not like about the service. New consumers are getting an email to welcome them and to encourage them to make use of the service, and Pandora actively tries to answer all incoming e-mail containing questions or suggestions. Tim Westergren, the founder of Pandora, is actively meeting new listeners and looking for new music by trips around the United States. Pandora reports on these trips by the weblog they have, and by email newsletters they send out.

“And we’ve also done, not for a little while, but we’ve done these studies where you actually put someone in front of the computer and you watch them trough a mirror, sort of like a typical user test.”

Collaborative co-design is not something that Pandora stands for, because they analyze and classify every track based on a musical genome by trained musical analysts. However, they implemented a new feature that allows for collaborative co-design. A recent method to allow for collaborative co-design is a feature which is called community feedback. When consumers overwhelmingly give negative feedback to a particular track on some similar radio stations with the ‘thumbs down’ feedback, the track will be played less on such a radio station. This community feedback is immediately going into work, without the intervention of the musical analysts. Pandora acknowledges this way that it is wrong about the genome, and will immediately play the track less on such a station.

“We’ve also recently added a feature just this week that allows for community feedback to influence playlists on a particular station. For instance, on a given station to say Coldplay radio which is a very popular station, if an overwhelming number of listeners react negatively to a certain song, that song has become less likely to play on that station for any user. So it’s kind of a community based feedback system that mainly applies to some of our more popular stations, but the concept behind it is if the Pandora community, if an overwhelming number of listeners say that ‘hey this song doesn’t fit into the station’, we’re going to use that feedback to adjust that playlist accordingly and make it less likely for that song to play on that station and only for that station.”

Other collaborative co-design methods are the continuous interaction that takes place between the player and the consumers. Each radio station is unique for every consumer. Pandora does not know what to do with all of the feedback that is being given, because consumers have different habits when giving feedback to the player. However, many new features are based on consumer feedback.

Lessons learned

Pandora Media can be classified as an involver in terms of the mass customization classification of Duray et al. (2000). The earliest point of consumer involvement is during the design and fabrication stages, while the type of modularity employed is present in the assembly and use stages. Variety at Pandora is high for consumers. All three factors which positively influence perceived variety are supported, while at the same time all assumptions (Blecker et al., 2006) to measure variety according to these factors are met. The perceived complexity at Pandora can be considered as high and low at the same time, the search costs for consumers at Pandora are acceptable and Pandora offers various strategies to reduce the perceived complexity for consumers.

It is not the intention to lower the average interaction length of time for consumers that are configuring a product. It could not be recognized that this has a negative influence on the perceived complexity, instead Pandora tries to let the consumers interact as much as possible with the interaction system while the product accuracy is good. This has implications for the number of alternatives searched by consumers. According to theory, a high value of this metric has a negative influence on search costs. At Pandora the products change all the time, which makes it necessary to keep searching for alternatives. Search agents are not the primary approach to search for products. The whole system is about discovering new products by listening to recommended music. The only factor that lowers the perceived complexity and could not be identified is the default version. All other factors can be seen as ways to support customization.

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One Response to Case study Pandora Media

  1. Mauricio says:

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