FOUNDER’S FAREWELL
Pandora Media’s CEO Tim Westergren among three top execs leaving the company,
Tim Westergren, a founder and the public face of Pandora Media, the company that popularized Internet radio, has resigned as chief executive and is exiting the board, Pandora announced Tuesday.
Westergren’s departure comes a little more than a year after he took over as chief executive, and is the most dramatic development in a tumultuous year for the company, which has struggled to keep up with the rapidly changing landscape of streaming music. This month, Pandora accepted a $480-million (U.S.) investment from Sirius XM, giving that company a 19-per-cent stake and three board seats.
In its announcement, Pandora said that Naveen Chopra, its chief financial officer, has been appointed the interim chief executive, and that Jason Hirschhorn, a former executive at MySpace and MTV Networks who runs a popular news aggregator, has joined the board.
“I am incredibly proud of the company we have built,” Westergren said in a statement. “We invented a whole new way of enjoying and discovering music, and in doing so, forever changed the listening experience for millions.”
Pandora, which was introduced in 2005, became by far the most popular Internet radio service, using a proprietary “music genome” technology that analyzed the musical characteristics of songs its users liked, and fed them more of them. The company, which went public in 2011, amassed nearly 80 million listeners each month, and built a substantial online advertising business, topping $1 billion last year.
But along the way, Pandora antagonized the music industry and was slow to adapt to the challenges posed by Spotify and Apple Music, which together have come to dominate the streaming market. Its growth slowed, and investors lost patience with continuing losses.
“Tim (Westergren) stepped in to be CEO at a critical time for the company and was quickly able to reset relations with the major labels.” TIMOTHY J. LEIWEKE BOARD MEMBER, PANDORA MEDIA
After taking over as chief executive in March 2016, Westergren began an ambitious effort to remake the service, but analysts worried that it may have come too late. Westergren struck new licensing deals with record companies that let Pandora compete directly with Spotify, Apple, Tidal and others by giving users a bigger catalogue and letting them listen to any song they want.
The resulting service, Pandora Premium, available for $10 a month, the same as Spotify and Apple Music, was introduced in the spring. But investors have been skeptical. Pandora’s share price has dropped by more than a third since the beginning of the year.
“Tim stepped in to be CEO at a critical time for the company,” Timothy J. Leiweke, a board member, said in a statement, “and was quickly able to reset relations with the major labels, launch our on-demand service, reconstitute the management team and refortify our balance sheet by securing an investment from Sirius XM. We support Tim’s desire to identify a new CEO for Pandora’s next stage.”
At the same time that Pandora announced the Sirius XM investment, it also announced that it had un- loaded Ticketfly, a ticketing service, at a significant loss. Pandora had paid $335 million for it in late 2015, but sold it for $200 million to Eventbrite, an independent ticketing company.
On Tuesday, a Pandora spokesperson also confirmed that the company would soon be exiting Australia and New Zealand, the only countries where it operated outside the United States.
Pandora also announced that Michael S. Herring, its president and former chief financial officer, and Nick Bartle, its chief marketing officer, were also leaving the company.
With these changes, Pandora will have undergone a nearly complete overhaul of its management in a little more than a year, and investors and music executives are now waiting to see what influence Sirius XM and its owners, Liberty Media, will have on the remade company.