Local Pandora Radio

It always worries me when I see radio people taking a shot at Pandora, the wildly popular customizable radio that is setting its sights on a local platform.

It’s kind of foolish because radio is doing more damage to itself than Pandora can do by diluting local personality radio. But that doesn't stop radio CEOs and their suppliers and hangers-on who are increasingly getting mad at Pandora founder Tim Westergren for simply picking up where they left off.

Look, let’s put it out there – if radio groups wanted to be in the local broadcasting business no one could beat them.


The problem is that the big influential owners don’t care to be in that business because they see radio as a commodity that will attract cheap dollars from national advertisers. So, keeping costs down is important to their potential profitability.

These repeater stations will just be conduits for whatever Home Depot wants to pay for spots. The programming is unremarkable and consolidator/CEOs don’t think they need great local programming using this model.

Along comes Westergren who has 40 million registered users and 15 million monthly visitors who all volunteer their zip code when they sign up for Pandora service. Now Pandora can target each listener where they live.

Is this iteration of Pandora local radio? Will it kill FM?

Of course, not.

There is no local programming involved on Pandora so I refer you back to my original statement that if radio groups wanted to be in the local broadcasting business no one could beat them.

What Westergren is going to do for starters – note I say starters – is try to monetize his audience by zip code.

Pandora began selling national ads not long ago. Has some big accounts like Microsoft and Nike. Is keeping the spot load light and has announced a deal with AdReady to grow the local business. In other words local radio advertisers can now add Pandora to the mix.

A reader heard one of the new Pandora ads:

“Just heard a local spot on Pandora (Boston Blazers pro lacrosse). First time I've heard/noticed one. Saw a mention of this in Tom Taylor's column this morning; pretty eerie to suddenly hear it live and active! Will more dollars flow in this direction as Westergren et al scale this? (Vs. terrestrial spend, as cheap as it's getting to purchase that time).”

The answer is yes.

Yes, more radio dollars will go to Pandora – why not, radio is increasingly a commodity (at least when consolidators run the show).

And it’s going to get uglier.

Pandora’s Westergren told Inside Radio that he expects to add talk content in the future. I believe the quote was: “There is no reason why we can’t deliver non-music content…”

Pandora talk?

What form that content comes in or when is not known. But Pandora is a considerable threat to radio groups that think they can sit back, cut talent loose, program non-compelling programming and thrive.

In other words, I believe radio CEOs are begging entrepreneurs like Westergren to pick up the slack where they left off and to do it better by customizing playlists and targeting advertising directly to specific zip codes.

It is the local marketing aspect that remains the most fascinating.

Users must provide gender, date of birth, zip code info when registering for Pandora and text ads, audible spots and more can follow. In fact, that’s why national advertisers like Anheuser-Busch, Toyota, Nike, Microsoft, and Procter & Gamble like Pandora as an add-on.

The Inside Radio article quotes Clear Channel Radio Digital COO Gerrit Meier as saying “Terrestrial radio is only threatened if it continues to think of itself only as terrestrial radio.”


My God, he’s been hanging around John Hogan too long. Terrestrial radio is threatened because it is owned by Wall Street bankers and equity holders who don’t understand that without local there really is no radio industry.

Just a commodity.

A network of unremarkable stations spewing cheap content for the purpose of carrying cheap advertising. Wasn't that the stated goal of Lowry Mays who arrogantly stated during consolidation that radio existed to carry advertising?

Nothing has changed -- as odious as that statement may be to us.

Strategically, Pandora cannot be stopped and there is no reason to stop it.

The real issue is when will radio CEOs finally figure out that the one “get out of jail” card they had was their local news, personalities, community involvement and the like? This is what they are rushing to piss away.

Non-consolidators know better. That’s why many local owners have weathered the recession fairly well and why local businesses still support them.

It’s why the bank on Main Street likes a local relationship with a station salesperson and wants to be part of the local morning show.

In the end, consolidators cannot have it both ways.

Last week I articulated the end game for consolidators as an explanation to why they are so hell bent to dismantle their local stations.

To summarize, they see radio as a cheap commodity that in their opinion can carry low cost ads at prices set by huge national advertisers as long as their local license doesn’t cost them any money to hold.

Fill the air with anything and run the spots for nothing.

Now, that’s a business plan!

And Lowry Mays told you so a long time ago.

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