CEO leaves the company
OAKLAND » Pandora Media said Tuesday that Chief Executive Tim Westergren has stepped down from his position as chief executive of the pioneering internet radio company, a move that only adds to the speculation about where Pandora’s business is headed.
One of Pandora’s co-founders, Westergren said in a statement that he was giving up the CEO job he had held for the past 15 months. It was Westergren’s second term at the helm of Pandora, after having served as CEO from 2002 to 2004. Under his leadership, the company finally launched its own, on-demand, subscription-based musicstreaming service, Pandora Premium, this March.
A Pandora spokesperson confirmed that Westergren won’t remain at Pandora in any capacity.
“We invented a whole new way of enjoying and discovering music and in doing so, forever changed the listening experience for millions,” Westergren said. “I believe Pandora is perfectly poised for its next chapter.”
Reports surfaced Monday saying that Westergren would soon step down from his job. Pandora said that Chief Financial Officer Naveen Chopra would serve as interim CEO, and that the company would begin a search for a fulltime chief executive.
Westergren’s departure was only part of an executive shakeup at Pandora, which also said President Mike Herring and Chief Marketing Officer Nick Bartle would leave the company.
Pandora also said Jason Hirschhorn would join the company’s board of directors. Hirschhorn is chief executive officer of Re-DEF Group, a digital content curation company, and is a former president of Sling Media.
What Pandora’s next chapter will bring is a matter of widespread speculation in the musicstreaming industry.
“[Westergren’s] sudden departure suggests that the board was dissatisfied with him altogether,” said analyst Michael Pachter, who covers Pandora for Wedbush Securities. “The board cleaned
house. Nobody is left from the old regime.”
While Westergren maintained publicly that he wanted Pandora to remain independent, he was also under assault from outside forces from almost the moment he took over from CEO Brian McAndrews in March 2016.
The company, which arguably begat the internet music-streaming industry as it is known today, stood by its ad-supported service for years while the likes of Spotify and Apple Music rolled out subscription-based music listening platforms that charged a monthly fee and offered full, on-demand control of song selections for listeners. By the time Pandora Premium went live two months ago, Spotify claimed to have 50 million paying subscribers every month, and Apple said it had more than 20 million.
Not long after Westergren became CEO, activist investor Corvex, which at the time owned almost 10 percent of Pandora’s stock, urged the company to explore selling itself. Pandora then spent much of 2016 as the subject of buyout or sale rumors. Several of Pandora’s recent earnings reports have also included a drop in the company’s year-over-year numbers of active listeners.
Investors showed their lack of support for Pandora and all of its uncertainty by driving down the company’s stock price. Since the start of 2017, Pandora shares have fallen almost 35 percent, to close Tuesday at $8.43.
Pandora partly sealed its fate when, in early June, it sold a 19 percent stake in the company to satellite radio company Sirius XM. As part of that deal, Sirius gets to put three members on Pandora’s board and choose the company’s next chairman. Some analysts said that Sirius may use Pandora as a method to get more subscribers to its own satellite offering, and could go so far as to shut down Pandora’s nascent monthly subscription services and focus on its free, ad-supported music streaming offering.
Whatever happens, it seems some changes are in store, if not a complete upending of the strategy Westergren announced in late 2016. That strategy included the plans for Pandora Premium, which costs subscribers $10 a month, as well as Pandora Plus, a $5-a-month ad-free streaming service that allows for unlimited song skips and replays, but not the selection of individual songs.
“It’s not clear to me that they intend to stay the course of their strategy they revealed in late October, especially since most of the people (from then) are now gone,” Pachter said. “And it’s not likely that the interim CEO will do anything dramatic until the board seats are filled [by Sirius].” Contact Rex Crum at 408278-3415.