Pandora's music box inspires fans

The founder of Pandora, a 7-month-old, so-called music-discovery engine, Westergren travels from town to town, sharing his time and story with fans who, because of his service, say they've rediscovered a love of newfound music.

From every town he visits--places like New Orleans; Austin, Texas; Portland, Ore.; and Biloxi, Miss.--he carries back to his Oakland, Calif., headquarters a bag full of CDs given to him by local taste makers. Songs on those CDs make it into the Internet-based radio of Pandora, which in seven short months has acquired 2.5 million registered listeners largely by word of mouth.

"To distill down why I started this company would be that for me, discovering new music is a religious experience," Westergren said here Wednesday evening while speaking to about 200 people, mostly fans of the service. This was the latest of about 25 town hall meetings and get-togethers Westergren has held since February.

"You guys are our precious early adopters, and part of this is to give you a big bear hug for using the service," he said.

In this audience, the feeling was mutual.

"I love it. I don't even play my CDs anymore," said Brendah, an attendee from Oakland who said she came because she just wanted to meet people from the company.

Pandora is deceptively simple. For free, members can create any number of radio stations based on the sounds of a favorite song or artist, such as "Blackbird" by the Beatles or just the music of "Prince." Once the artist or song is found in the system, the station streams from the Web, within seconds, music that is rhythmically or artistically similar. Because of licensing restrictions, Pandora does not play any one song on demand.

Video: Opening Pandora's music box
CNET News.com's Stefanie Olsen takes a spin with Pandora's free music service, a so-called music-discovery engine.

People can give a newly played song a "thumbs up" or "thumbs down" to tailor future selections, or they can request a new song or artist to add diversity.

Pandora employs 42 music analysts--people, often musicians, who have a background or formal training in music theory--who spend about 20 to 30 minutes noting the so-called DNA of a song for the database. About 10 percent of songs are double-recorded to ensure accuracy, Westergren said. Pandora now includes the "genes" of 500,000 songs, and it's adding about 10,000 songs a month.

Like many Silicon Valley tech founders, Westergren went to college at Stanford University. But unlike other technology executives, he toured with his band, Yellow Injunction, for 10 years, living out of his van at one point. During that time, Westergren said, as the band got "almost really big," he discovered the obvious truth of the music business: Only a few succeed.

Of the 27,000 new CDs released last year and registered with SoundScan, a music measurement company, only about 5,000 accounted for sales.

So he was compelled to find a way to get music's middle class heard. In 2000, he started the company Savage Beast and the Music Genome Project. The goal of the Music Genome project, and now Pandora as a commercial service, is to codify as many as 400 different attributes of a song, such as composition, bass line and rhythm, and then catalog that music and musician so people can find the "musical neighbors" of any song, whether it's Latin, jazz, country, rock or gospel.

At the same time, Savage Beast was formed as the business around the Genome project, a business that would license the searching of musical metadata. The company raised venture funding in March 2000, at the edge of the dot-com slide, and as Westergren said, "we fell off too." The business continued to run, but Savage Beast eventually ran out of money. Over two years, "playing music was the reliable job," Westergren said.

In 2004, the company moved toward online radio. Broadband adoption had become widespread, making streaming radio more viable. And the Digital Millennium Copyright Act paved the way for an online radio service by establishing business rules for licensing streaming songs. The company raised $8 million from a group of Silicon Valley venture capitalists and had marginal success licensing technology to AOL and Best Buy.

"We popped our head up from a bunker, and online music was a mass experience," he said. "It looked like the perfect view of this world was in creating and manipulating playlists."

Enter Pandora.

The service launched for friends and family in October 2005 and quickly drew 5,000 users. In November, Pandora opened its free memberships to the general public, and it has been adding as many as 25,000 new listeners a day. Its most popular ZIP code? Beverly Hills' 90210.

Now music people in Hollywood are using Pandora to find song standards for films, and concert bookers use the recommendation engine to find opening acts for musicians, according to Westergren.

"Like people google for things, we hope to become the go-to trusted music-focused place that's resurrected music for people," he said.

One of the top requests for music stations on Pandora involves the Cuban music of "Buena Vista Social Club," but the company has only recently started cataloging Latin music. Westergren said he hopes to add many types of international music to Pandora, but the licensing involved with adding overseas tunes can be a headache.

Despite its devoted fans, Pandora is not making money yet. The company is hiring people to build its advertising sales, which is the company's chief source of income, outside of some paid memberships in return for no advertisements.

For now, the 70-person Pandora team is working on improving the service, adding more functionality and music and making it mobile. Right now people can listen to the service throughout their home wirelessly with the Squeezebox device, a wireless radio box, but Pandora hopes to ink more such partnerships.

Meanwhile, Westergren will take to the road this fall, meeting with college students at the University of Michigan, among other campuses. He has come a long way since February, when he met two people at a bar in Portland and was stood up entirely in a bar in San Antonio.

"I ate like 15 sopapillas (Mexican fried treats) that night," he said.