Pandora’s chief executive and co-founder Tim Westergren intends to hand over the reins at the company, according to a report in Recode citing people familiar with the company’s plans.
The music streaming company hasn’t chosen a replacement for Westergren, according to the Recode report, citing sources, but the former chief executive will remain involved with the company until a replacement is found.
The co-founder and long-serving Pandora employee took the helm at his company in 2016. Before, Pandora had been run by a series of executives.
News of Westergren’s departure follows a cash infusion of about $680 million into the music business, through a $480 million investment from Sirius XM and the $200 million acquisition of its Ticketfly business by Eventbrite.
As we reported at the time of the investment and acquisition, Pandora’s business was facing significant headwinds.
The two moves bring Pandora into a new chapter in how it will develop its business: the company today still makes most of its money from advertising around free listeners, although it has been working on building paid tiers to supplement that for some time now. In the meantime, the stock’s main boost since last year has been the fact that it’s been the subject of takeover speculation.
SiriusXM was once rumored to be interested in buying Pandora outright, one of a number of potential suitors. (One of those outliers? Spotify, of all companies.)
While an outright sale of Pandora appears to have been taken off the table for now, this will give it a much-needed cash injection, as well as a strategic partner experienced in the radio business that might help steer it to more growth in a very competitive market.
Pandora faces a couple of issues in its business. For one, digital music streaming companies are still coming under a lot of margin pressure because of the costs for licensing music. Another issue for Pandora is that it has never managed to expand significantly outside of its home market of the U.S. The Sirius investment could give it a cash boost and also some economies of scale in negotiating those deals. And, on SiriusXM’s side, it gives the company some differentiation in its business.