How Pandora plans to beat Spotify at its own game (P)

January 29, 2016 at 11:22 AM EST

Pandora

After scooping up parts of Rdio late last year for $75 million, Pandora’s next big move will be into on-demand music, where people pay a monthly subscription for the right to play any song they want, whenever they want it.

“A huge number of our listeners today are spending upwards of 20 hours a month on Pandora, and also pay for an on-demand service,” Pandora CPO Chris Phillips tells Business Insider.

For him, it’s a pain point. There are certain things these customers want, like downloading songs for “offline” playback, that Pandora simply can’t provide because of how its royalty deals are set up.

That will soon change — but a new area of service means a new battleground, and new potential pitfalls. Apple Music certainly hasn’t wiped Spotify off the face of the planet.

So how does Pandora plan to win? Simplicity, combined with a really smart algorithm that understands your tastes.

Keep it simple

When describing Pandora's design philosophy, “we use words like effortless, really, really drop-dead simple and easy,” Phillips says.

This has allowed Pandora to appeal to a wide audience that spans both younger and older generations. It's not something you have to spend a lot of time tinkering with like Snapchat.

“So, when you ask which way we’re gonna bend on the design side [for on-demand], we’re gonna lean way towards the ease, simplicity, the ‘we can do it for you,’ to get people going quickly,” he continues.

And that means trying to simplify the entire interface when new layers of complexity, like on-demand, are added.

“Every time we add something, we want to find a way to make the app even simpler," he sayd.

"When we added the ‘browse’ capability [a personalized station recommendation section released on Thursday] that’s where we came up with, ‘Well, now we have to make getting to ‘Now Playing’ even simpler.’ We added the mini player.”

Understanding musical taste since 2000

Pandora was one of the very first companies to try and build a way to understand people's musical tastes and recommend songs accordingly. The original technology was called the Music Genome Project, and it was created by Pandora cofounders Tim Westergren and Will Glaser way back in 2000.

So Pandora has no doubt noticed the success of Spotify’s Discover Weekly feature, which debuted last July and became a cult hit. The feature delivers a personalized playlist to its users each week on Monday morning, filled with songs they'll actually like.

In December, Pandora introduced its own take on Discover Weekly called Thumbprint Radio. The feature creates a Pandora station from everything you've ever "thumbed up" (liked) on Pandora. It's the single place you can go to get quick new recommendations, and it's also been a word-of-mouth success.

"We built three new algorithms just to support this station," Phillips says.

Pandora's recent addition of a "browse" tab, which presents you a set of stations you might like, is again pushing toward the machine-learning recommendations of Spotify.

Pandora has always lived on its algorithm's ability to suggest songs that you like. So the enthusiasm “Discover Weekly,” over things like celebrity playlists, bodes well for Pandora's entry into the on-demand space.

“We think the personalization and the way we do the music science will attract music fans,” Phillips says.

NOW WATCH: If You're Going To Pay For Music — Pay For This