Interview: Pandora Australia's MD Jane Huxley

3rd Apr 2013 | 23:15

Interview: Pandora Australia's MD Jane Huxley

Opening the box on Pandora's first few months in Australia

Interview: Pandora Australia's Jane Huxley

It was a relatively quiet launch last December when Pandora finally crossed the Pacific and opened up shop in Australia.

Now, three months later, as Pandora is celebrating the launch of its Windows Phone application around the world, TechRadar took the opportunity to chat with Pandora Australia Managing Director Jane Huxley to discuss the new app, the first few months and what we can expect in the future.

How's everything going in Australia?

Jane Huxley: Everything is going incredibly well. It's a market that is behaving very very similarly to the US, which is kind of what you would expect.

The take up however has been faster than what it was in the US. It should be - we're on version four of a very good product, so it should be tracking a little bit faster than where the US was, but it is behaving in a very similar way.

It's a very mobile-centric market - over 75% of our listening is on a mobile device here, and that's growing.

And so it's just been really well received, and I've had some great feedback.

On the mobile front, is that what you were expecting?

JH: Yeah, exactly. That's what it's at in the US. It's actually a little bit ahead of that here.

But music itself is incredibly personal; the mobile phone is a very personal device. The Windows Phone in particular makes it even more personal through Live Tiles, so all of those things come together and that's really driving a lot of mobile take up for us.

We'll be heading to about 90 per cent in the next couple of years, so this is very much a mobile business.

The Windows phone partnership - how did it come about and where is it going?

JH: Obviously we've been partnering with a number of manufacturers, and we've brought Pandora to over 1000 devices in fact, working with device manufacturers as well as listeners is a really core part of the way that we get Pandora into the ears of people.

And the Windows 8 Phone itself is an incredibly personal phone. You can pin a station right to that start window.

You can see what's playing, with one tap you can access your most recently played station, your favourite station, it's just a really really nice combination and I think that's what it took to really fire up the partnership between Pandora and Microsoft, and hopefully it's the start of a lot of things that we'll do together.

Pandora Windows phone

Obviously Live Tiles are crucial to Windows Phone, but Android devices have a fair amount of customisation options through widgets and skins. Is there any reason that the Microsoft partnership has managed to achieve more of that personalisation than the other platforms.

JH: I think that is the difference between customisation and personalisation. Customisation is really where you get to decide what it is that you want to access from a particular device.

But the Windows Phone has taken it one step further, in that not only do you get to decide, but you get to see.

They have some great sayings there: "You are what you pin". I love that, because that's equally relevant in music, you know, "you are what you listen to" in music terms.

And being able to see what you're listening to, particularly for Pandora where discovery is such a massive part of our product, being able to see what you're listening to just by glancing at the phone rather than having to go in, undo the screensaver, go to the app and have a look at what's playing. Bbeing able to just glance at the phone to find out what's playing, that's a great experience for Pandora.

When people are listening to Pandora, because 70 per cent of our catalogue is independent music, you'll quite often get served songs that you've never heard before.

And you're listening along and you'll think "God, I love that song, what is that?" and you'll have a look at the phone and you'll think "Oh, I've never heard of them wow, that's a band I've never heard of."

And being able to do that at a glance with a Windows Phone is just a really nice way to use Pandora.

And as part of the deal, Microsoft will be offering the paid service for free for 12 months?

JH: No, it's ad-free until the end of 2013 is actually what's going on, and that is brought to you by Microsoft. They've done that as a value ad for the Windows Phone community.

And that's a great thing for us to be able to provide an ad-free Pandora to our listeners or to the users of the WIndows Phone, and it's a key part of our partnership and it's a nice value-add.

Do you see the partnership as a branding exercise, or as natural expansion?

JH: It's more of a natural expansion to us. Our goal is to make Pandora ubiquitous. If there are devices that connect over Wi-Fi to the internet, whether it be a refrigerator or a jacuzzi or a car or a phone or a set-top box, wherever devices are that people want to listen to music, we want Pandora to be on that device.

And the stuff that Windows does is pretty ubiquitous across the day. From PCs to mobile devices to stuff in the home, and that's a great partnership for us to have, so it's part of a natural set of synergies rather than a branding exercise.

So with MS fighting for third in the mobile marketplace, from their perspective do you see the deeper Pandora integration being used as a recruitment tool to the Windows Phone platform?

JH: I'm not really sure about a recruitment tool. What we've seen in phones in particular is that the real differentiator has been the app stores, what kind of content people could access through the phone.

And I think this is where Apple did a really good job vey early on in providing a lot of choice and a great, easy to access set of content for the phones, and of course we then saw Google Play do the same thing.

Microsoft is now at over 130,000 apps in their store, and particularly from a US perspective, Pandora is very much a "jewel in the crown" app to have, and I think that's what was important to Microsoft.

One in three people with a smartphone in the US have accessed Pandora in the last 30 days. So for Microsoft to have a partnership with Pandora I think is an incredibly natural fit in the US and by natural extension here in Australia and New Zealand.

But vice versa as well. People who use the Microsoft ecosystem will likely drift towards the Windows Phone over time, so it's kind of a win-win.

Part 2: The Future for Pandora in Australia

Moving away from mobile for a second, Pandora was kind off announced in Australia by Holden...

JH: Kind of? What have you been reading?

It was on a slide for a car that Pandora was coming, and then you guys launched a month or two later…

JH: I didn't know that you'd noticed. We launched here in the middle of December, and it was pretty low key. This is not a company that does a lot of splashy advertising, big events etc. It's a company that has spent a lot of time and effort on its product and the people who use it.

We operate very much on an advocacy model, rather than an advertising model. People who download and use Pandora generally recriuit eight others, and that's the best way to get the product into somebody's hands, having someone you know and trust tell you "hey, I've just found the best secret in music ever, you need to download it to your phone."

Looking at the numbers build, that advocacy model is holding as true, if not truer here in Australia as it does in the US.

For Pandora here it's just me here on the ground - I work out of my handbag with an iPad and two pairs of shoes - and I watch those numbers grow 12-15 per cent a week and I can see that advocacy model at work.

Pandora Windows Phone

Do we have Australian figures?

JH: I have Australian figures, but it's not something we're going to be prepared to talk about for a while. We are in audience building mode, that it my remit.

I will be moving out of my handbag and my two pairs of shoes in May, I've made my first hires here, I've got premises, we'll be moving into Surry Hills and from there on we'll really be growing this company as fast as we can.

We're seeing a lot more emphasis on in-car entertainment at the moment, and following on from that Holden announcement last year - is that the next big growth area for Pandora? Is that what we can expect from you next?

JH: Pandora is already on 85 manufacturers of cars, obviously primarily out of the US. And over time we'll see those relationships extend to Australia and New Zealand.

When people listen to music, there are two ways that they do it. There's an active listening mode and a passive listening mode. And it turns out that about 80 per cent of the time we're listening to music passively.

20 per cent of the time we're in active listening mode, and that's where you use a Spotify or a MOG or an Rdio or your iTunes collection or physically put CDs in and out of a drive, where you are actively dictating the type of music you want to listen to.

The 80 per cent of passive listening is where music is just playing. And that's the end of the spectrum where Pandora plays. We play in that passive music space as opposed to the active music space where you see a lot of the on demand players.

Bringing that back to the car, just over 50 per cent of that passive listening is done while you're in a vehicle. Entertainment is becoming a real differentiator in the auto space, mainly because we've moved on from differentiators being around safety and fuel economy.

When you buy a car now, it needs to tick the safety box, it needs to tick the economy box, so a lot of manufacturing in cars, the competition has now moved into the entertainment space.

We saw this a few years ago when everybody was clamouring over the DVD screens in the back of the car, and now we're really about the choice of entertainment, centring on music.

For Pandora, it's a case of right place, right time. As I said, we're on 85 manufacturers of cars in the US, and we'll see that extend out here.

Pandora in the car has been a major feature. For example, in the US, Honda released two models over Christmas, and the advertising featured the Pandora integration.

We'll see this market go in that direction here, but the life cycle of a car is around 11 years, so it's a slower burn here for us.

Holden MyLink with Pandora

Considering everything you just explained, is there a real drive to try and speed that process up locally?

JH: That's the in-car integration. Already, a lot of cars are Bluetooth enabled, so I listen to Pandora through Bluetooth in my Tiguan.

We're also very actively working with aftermarket stereo manufacturers - so JVC, Pioneer - all those models are shipping with Pandora in the US and increasingly in Australia.

Interestingly enough, the first two roles I hired here for Australia and New Zealand are business development roles. And those roles will be working with device manufacturers that are both local to Australia, as well as fast tracking the relationships that we have with the thousand providers we have in the US and enabling them for this market as quickly as we can.

Has there been a big take up on the paid version of the app?

JH: We're not actually running any adverts here in Australia yet, we're just in audience building mode. Strangely enough, there are quite a big number of people who have subscribed, despite the fact that there's not really a value proposition here.

And I get people saying to me all the time that they want to pay. It throws light onto the argument that people will pay for content they love.

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