Why Pandora Is Poised To Be The Kleenex Of Music Discovery

One of the many findings from our recent report on frequent social networkers that struck me as significant was this statistic about Internet radio. We asked a representative sample of Americans who had ever listened to Internet-only audio what brands they could recall in the space. This was a completely open-ended recall question, and multiple answers were accepted. Amongst all Internet-only radio listeners, Pandora was on top, with 28% of the sample recalling the popular online music service. However, amongst frequent social networkers – those users of social networks who visit their social sites and services multiple times per day – this unaided recall figure soared to 40%.

pandora recall.031.png

Why is this significant, and what does this mean for Internet radio in general? First of all, it’s important to recognize that frequent social networkers are not a super-niche of unrepresentative Americans. As I’ve noted before in this space, not only has the percentage of Americans who use social networks doubled in two years, but the percentage of Americans who visit those sites and services multiple times per day has also grown dramatically just since last year, from 18% of social networkers to 30%. The growth of both datapoints has led to the number of Americans who check social networking sites multiple times a day doubling from approximately 18 million Americans to about 39 million.

frequent social networkers double.006.png

The final piece of the puzzle from a data perspective is this: frequent social networkers not only visit social sites more often than other users (by definition), they are also more likely to post updates – to create content, in other words.

status updating by frequent social networkers

What this little tidbit of information reveals is that people who have the social habit aren’t just consuming more, they are creating more. They are more likely to be sharing links, recommending funny videos and – yes – sharing music than other social networking users, who are more likely to be lean-back consumers of the social web. The web runs on text, and if a disproportionate amount of that text is being created by those with the social habit, then what this passionate group of people is writing about and sharing online becomes even more important from a branding perspective.

All of this means that consumers with the “social habit” are more likely to be updating their Facebook walls with shared music links than your average bear – and doing it multiple times per day – which makes Pandora’s integration deal with Facebook even more significant. When I originally wrote about the import of this deal on The Infinite Dial, some in the radio industry accused me of “punditry”; proclaiming that the sky was falling on Radio’s dominant role in music discovery. It was, in fact, this research that informed my opinion.

The secret to owning music discovery online isn’t about the music – it’s about the data around that music. In the case of music recommendations online, the data that will increasingly give music meaning is going to be context, not collaborative filtering. That context is going to come from my friends – the people with whom I connect online, every day, several times a day. Facebook and Pandora have given those content creators the tools to easily “like” music and share it via Pandora links, and Pandora’s incredible top-of-mind awareness with these content creators means that it will be the go-to service for sharing those links amongst those who share the most. We may be rapidly approaching the day when “let me Pandora that to you” becomes as common as “let me Skype you” or “you can just EBay that.” Pass the Kleenex.

Pandora’s competitors (both terrestrial and pure-play broadcasters alike) can combat this commodification of music discovery by adding meaning, context and significance to their own data online – by creating content around the music. Some of Pandora’s competitors already are doing this – surely this is at the heart of Kurt Hanson’s new Accuradio venture, Chicago Radio Online, which not only plays the music of Chicago, but brings back some of Chicago’s favorite radio personalities to curate the experience. That curation has to extend beyond audio, however, to blogging, sharing, and interacting with listeners on the social networks of their choosing. In other words, creating text around the music. If all you are doing online is being a jukebox, you’re trucking wheat, and it’s wheat that doesn’t even belong to you. All you can ever own is the content you create around that commodity to give it meaning and value. Those that successfully do this will always have a spot at the table (especially the local table), and even have a shot at turning Pandora into the very definition of kleenex: a disposable commodity.

1 reply
  1. Carroll B. Merriman
    Carroll B. Merriman says:

    Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage for the Zune, but the 10 songs per month will still be a big plus in Zune Pass’ favor.


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