Two days after Pandora Media founder and CEO Tim Westergren said he will step down amid a management shake-up, interim CEO Naveen Chopra on Wednesday assured investors the online radio pioneer can withstand competition from on-demand music streaming giants like Sweden’s Spotify and Apple’s Apple Music.
“We don’t need to go into hand-to-hand combat with all of those players as though we were entirely dependent on the subscription business,” Chopra told the Bernstein Future of Media Summit during a presentation that was webcast.
Pandora president Mike Herring and chief marketing officer Nick Bartle are also leaving the company, and the search for a new CEO has started. The executive suite turmoil follows satellite radio giant SiriusXM Radio agreeing to acquire a $480 million stake in the online radio service after Pandora launched its own on-demand music subscription service.
The deal with SiriusXM, expected to close by the end of 2017, comes as Pandora goes head-to-head with subscription music streamers like Google Play Music and Amazon’s Amazon Music Unlimited. Chopra in his upbeat presentation said Pandora can compete against Spotify and Apple Music with a superior passive listening experience offered by online radio stations based on artists and tracks.
“We believe that the primary listening experience is passive, for most people, meaning 90 percent of the time you just want to listen to music you like. It’s not about picking songs you like and building playlists,” he argued. Chopra forecast Pandora and SiriusXM will work together to bring more legacy consumers of terrestrial radio over to online radio platforms, and will collaborate to bolster their respective advertising businesses.
He also reported during recent negotiations that KKR was in line to provide $150 million in new investment in Pandora, before the larger deal with SiriusXM, which is controlled by John Malone’s Liberty Media, was concluded. “With one deal, we were able to answer a lot questions. It brings Sirius and Pandora together and gives us a lot of capital,” Chopra said.