Here is an example of good PR at work. At the IAB MIXX conference this Wednesday, I ran into a sales associate from internet radio service Pandora who stopped by the press room to drop off some marketing materials. We drummed up a converstation, where I mentioned I’d be interested in speaking with someone who does communications for the company.
The sales associate took down my info and just an hour or so later I received an email from their director of communications, offering to set up a meeting with Tim Westergen, Pandora’s founder, to talk about some of the communications strategy the company has employed as it deals with an intense industry debate about royalty rates for online radio that could potentially shut down the service, as well as many others.
Over breakfast this morning in New York, Westergen said the company is “cautiously optimistic” about surviving this latest hurdle. As cited by FishbowlNY’s Noah Davis, Pandora pays 70 percent of its revenues to labels and artists.
Regarding communications strategy, Westergen claimed the company “spends very little time on messaging,” but they think more about “how we can get conversations going about Pandora.”
If anything, it seems Westergen has nothing to hide.
He travels the country holding town hall meetings, which are open gatherings of Pandora listeners. They can speak with him in an “unstructured, unedited dialogue,” he says, adding “we love that form of communication.”
Adding to that, Westergen states, “If I do a media interview and we have a big story, it’s dramatic and noticeable, but I don’t think it’s how people come to know about Pandora. It’s word of mouth.” The company has conducted research showing that the average Pandora user tells eight other people about the service.
When asked what he thinks about how the issue has been framed in the media, Westergen says the other side (industry groups like the RIAA) have claimed internet radio “hasn’t done a good job of monetizing,” something he disputes, saying that despite the “enormous structural advantages” of broadcast radio, Pandora actually “pays a far higher royalty rate” and that is “fundamentally the most important issue.”
One positive sign this week in Pandora’s efforts to monetize in different ways is the company’s popular iPhone app, which now also serves advertising with a click through rate of .96%, according to Westergen.
While the end of this battle is currently not in site for Pandora and other internet radio companies, Westergen feels confident. “The tide is turning in a good direction,” he insists, “and it’s thanks to the listeners, two million of which have called their representatives about this issue.”