Pandora Gets Some Ink in Inc.

Inc. magazine has a cover story on Pandora in its latest issue. Here's a link to the story, and here's an excerpt:

Westergren realized he had a huge weapon in his arsenal: his customers. Westergren sends a welcome e-mail to everyone that signs up. It's an automated e-mail from an alias address, but whenever anyone replies, he replies back. Last year, when he was touring the country looking for new music, Westergren decided to begin holding meetings with listeners. He'd choose a locale, post it on the Pandora blog, and invite anyone in the area to attend. Four people attended the first meetup in Austin, but as he traveled to a senior center in Phoenix, a taco joint in San Antonio, and a lecture hall at MIT, the groups grew, and soon dozens, even hundreds, of listeners were attending. All the effort spent courting nonpaying customers might seem excessive, but it lets Pandora spend next to nothing on marketing. In any case, the listeners responded. Some have become so fanatic that they've written songs about the site, sent boxes of fudge, and even made donations.

That work turning customers into fans, Westergren realized, meant he could rally them behind the royalty rate issue. So he sent an e-mail to all the Pandora listeners that identified their representative and senator and asked them to write in. Pandorans responded. Westergren estimates that about one million e-mails, phone calls, or faxes were made or sent by Pandora listeners. California Democratic Senator Dianne Feinstein received 25,000 e-mails; in the office of Jay Inslee, a Seattle-area representative, correspondence about Internet radio equaled that concerning the Iraq war. Inslee and Illinois Representative Don Manzullo drafted a bill that brought Internet radio rates in line with those of satellite stations; in the Senate, Sam Brownback and Ron Wyden sponsored a companion bill. "I said, 'Oh, my gosh, this is a bombshell ready to explode with the small radio stations,'" says Manzullo.