Music streaming service Pandora may be looking to sell itself, but more immediately it’s focused on firming up its management structure once again to shore up investor confidence. Today the company announced that founder Tim Westergren has taken the helm as CEO. Brian McAndrews, who had been CEO, is leaving the company.
The changes take place immediately, along with a wider new management structure.
“I am incredibly excited about the future of Pandora. We’re on the cusp of realizing an extraordinary vision: fundamentally changing the way listeners discover and enjoy music, and the way artists build and sustain their careers,” said Westergren in a statement. “We are pursuing a once-in-a-generation opportunity to create a massive, vibrant music marketplace. We have the audience, the technology infrastructure, the monetization engine and most importantly the right team with the passion and commitment to do it. I’m 100 percent committed to Pandora’s growth strategy, as is our executive team and Board.”
Westergren, who founded the company in 2000 and was initially its “chief creative officer” and treasurer, also briefly served as CEO from 2002 to 2004. McAndrews, who is leaving the company today, had been in the job for 2.5 years.
In addition to Westergren, there are several other executive changes being made at the same time. Mike Herring becomes President and Chief Financial Officer, where he will focus on “monetization of Pandora’s core business covering revenue, music licensing, finance, legal, and information technology. He will also continue to focus on driving efficiencies and expanding margins.”
Sara Clemens, as Chief Operating Officer, will focus “on growing and scaling the business and operating new ventures. Her responsibilities include music makers, Ticketfly, international, human resources and corporate development.”
Pandora’s Chief Product Officer, Chris Phillips, will take charge of product, engineering and marketing. “His team will develop, deliver and drive adoption of products that connect fans and artist in new ways, including on-demand, and help advertisers reach their audiences,” the company said.
Pandora’s business has been on a bumpy ride for a while. Last quarter the company reported 81.1 million listeners, down from 81.5 million a year ago, with revenue guidance coming in below analysts’ expectations, sending stock into a decline. It’s also been losing key talent, such as Tom Conrad, who joined Snapchat earlier this month.
Pandora today also reaffirmed its previously announced revenue and adjusted EBITDA guidance. (The company in January said it expects fourth-quarter revenue to be between $325 million and $330 million, up 21%-23% year over year, which was short of analyst expectations.)
The company has been building additional features into the platform — specifically new services like AMPcast (an artists’ audio messaging service expanded also this past month). These new services are geared towards artists monetizing their content better. This is a key area that all digital music services are trying to develop to leverage their audiences better, in particular as a response to the launch of several “native” music services from the likes of Apple and Google that may attract users away from over-the-top earlier movers like Pandora and Spotify.
“Pandora today is in a strong position to maximize our full potential and expand the music marketplace. Tim is the ideal CEO for Pandora as we embark on our next phase of growth. As the original founder, Tim carries the vision for how Pandora can transform the music industry and he is uniquely able to connect with listeners, music makers and employees,” said Chairman Jim Feuille in a statement. “Pandora has become a stronger company under Brian’s leadership, and we thank him for his commitment and contributions to building Pandora’s core leadership team and strengthening its position in the market. Moving forward, we have an excellent executive leadership team that is focused on activating Pandora’s strategy and driving long-term value through a relentless focus on execution and operational excellence.”
Now, it’s going to be interesting to see what Pandora is going to do with a new person at the helm of the company. Rumor has it that Pandora is working with Morgan Stanley to find a potential buyer. But at the same time, Pandora has acquired Rdio assets for $75 million and Ticketfly for $450 million.
When you want to sell your company, you don’t start making substantial acquisitions that are going to affect your core business and add new products and services. You try to trim it as much as possible.
There are a few outstanding questions if Pandora remains an independent company. Is there a future for a stand-alone radio-like music service like Pandora? Full-fledged streaming services like Spotify and Apple Music also have radio-like features. It’s unclear whether users want to deal with multiple music apps or concentrate all their music needs on one platform.
And then, Pandora is highly dependent on royalty rates. Recently, rates have been slightly lowered, making investors optimistic about the company’s future. But there will be new negotiations in a few years, and Pandora still seems highly dependent on these negotiations.
Shares are currently down 8.78 percent to $9.97, back to Wednesday’s price.
Updated and corrected details of Ton Conrad’s departure.