Pandora is dying or already dead

Mark Twain said famously that the reports of his death were a bit premature. With Pandora, the site may already be dead and we just don't know it yet.

Barbara Krasnoff posted in her Computerworld blog about the music discovery service started by Tim Westergen [corrected], and how it may be going under. No, it's not re-locating to Australia: according to a Washington Post piece, Pandora is seriously considering closing its door. It has been an uphill battle fighting new streaming radio taxes (it is now double the amount it was before), and the site is losing money, so they may close if they think they can't fight the good fight in Congress. I like Krasnoff's summary, although she doesn't appear to be a diehard music fan with broad musical tastes.

This makes me a renowned expert, I guess. I downloaded 32 new CDs just today on the Zune music service. So I am now into For Against (weird indie rock), Karmina (girl pop), Protest Hero (hard emo) and a Relient K collection of B-sides. I found these bands in my usual way: searching through forums like the one on Rolling Stone that lists best CDs of the year so far. (I am not sure if I will ever get this far off-topic again, but you can read my reviews in the print issue of Relevant Magazine.)

Anyway, as a rabid music fan, I love Pandora for what it is: a way to find new music when you get tired of listening to your favorite bands. I don't listen to Pandora every day. I use it for things like: when I finally got sick of the new Augustana release, and I wanted to find similar bands, I just type them in and find new options. I could have just clicked on the "related music" links at the Zune music service, or one of a hundred other methods of finding new music, but Pandora works really well and lets you listen to complete songs, not just wade through bands names.

So what is killing them? Pandora has to pay 70% of their $25 million in revenues for streaming media royalty fees. That number seems unusually high to me, especially for an Internet music service. I asked Pandora if they were about to close the site and they have not responded yet.

It would be a shame if legislation over streaming radio closed a good site, run by a nice guy with a great vision. I will say this: I think they should press on. Pandora may not be as widely known as Google or Yahoo, but they certainly have created a strong following.

So what can save them? I think one road to victory is by aligning with labels more closely. In my example with Augustana, if the labels paid Pandora more money when I clicked on the band Maine, for example, they could stay afloat longer. Maybe the site should consider more advertising -- get me to buy Maine CDs.

Another avenue: go 100% indie. Indie musicians can hand over the rights to play their songs. So, if I type in Augustana, I don't have to hear the band itself -- I am probably sick of them anyway -- and can explore indie artists who sound like them and buy their CDs through Pandora.

The site could also just play samples instead of whole songs. That might keep people coming back, and they can avoid the royalty fees they pay when they stream the entire song. I'm not sure how long the sample has to be to be considered short enough to avoid the fees, but it is likely about 10 seconds or so. That at least still matches up with the vision of the site as a discovery engine.

Hopefully the site will survive; if it doesn't maybe it will transform into something even better.