Pandora's CEO on turning around the streaming music giant
Roger Lynch joined internet radio company Pandora as chief executive almost a year ago at a time when the company's wasn't doing so great.
Now, things are looking a little better. On Thursday, the company announced a new tie-up with AT&T that will bring Pandora to the telecom company’s “&More” plan.
Lynch, whose digital bonafides include starting Sling TV, is spearheading Pandora’s battle for a slice of the $15 billion terrestrial radio ad business. He told NBCNews.com how he is trying to reverse user declines amid competition from Spotify and Apple Music. Lynch is set on growing partnerships beyond Pandora’s tie-ups with Snap, AT&T and T-Mobile and personalizing the business of podcasting.
Q: What made you join Pandora and what are its challenges?
A: I was intrigued by the scale of the business. Almost one in three adults in the U.S. uses Pandora every month. There was a lot of negative press around the time I was joining. It’s starting to turn now mainly because we are making some changes and the momentum of the business is starting to change. I thought it had real strength in digital audio advertising and I looked at that as a growth opportunity.
When I worked at Sling TV, it was let’s go kill cable and satellite and replace it with internet delivery and that’s what going to happen in radio too.
Q: What are you active uniques?
A: Seventy-two million last quarter. Last year the business saw year over year declines start to slow towards the end of the year.
Q: What do you attribute that to?
A: It was competition having an impact. It was more execution challenges. Think about how much growth has happened in music streaming services. Pandora has been surprisingly resilient. Job one was stopping that decline. We were able to do that quickly by the end of the first quarter. Hopefully, we will be back to user growth.
Q: How will you do that?
A: Pandora has huge capabilities in data science, and we use it well for our advertisers. That’s why we can generate well over a billion dollars in ad revenue. Pandora didn’t use it very effectively in its own marketing. That to me was one of the quick wins. We built a new marketing team, built new marketing datasets for our marketers, so that is starting to happen now.
Q: Marketers are looking for a hedge against big technology firms and mega-media mergers. Audio streaming is something that’s growing. How are home voice assistants changing that too?
A: Digital audio is one of the only formats not controlled by one of the FANG [Facebook, Apple, Netflix, Google] stocks. That to me is one of the opportunities. There is a lot of growth around new devices and new content. To be really good at creating anything around monetization around voice, you have to have the data and you have to be really good at audio.
Q: Let’s talk about rights deals with the three big music labels? They don’t like free. They’d rather have a piece of a subscription model.
A: We have a good relationship, which was not the case three to four years ago. That’s changed dramatically.
If we could all wave our wand and turn every listener into a paid customer, we would, but that’s not how consumers behave. and the labels are starting to understand that. They were and are enamored with a subscription, as are we. Subscription revenue grew 62 percent last quarter. But huge numbers of consumers aren’t going to be [subscribs] and it’s not about ability to pay. Lebron James said he still uses the ad-free version of Pandora. That’s an example of how it’s not a money issue. He just prefers not to pay. As Pandora gains share from radio, the labels benefit. They don’t get paid from them — they get paid from us. Pandora in 2016 did its first deals with labels and those were two to three-year deals.
Q: What are you doing in talk radio?
A: We have announced we’re moving into podcasts and spoken word in a much bigger way. Think about podcasts today. It’s about lists. It’s not really personalized. What Pandora has done for music, we’re going to do for podcasts. Use all the data science we have to promote content to you that we know will be relevant. In some ways, podcasts are still in the stone ages.
Q: Where do you see the future of the media business on a macro-level?
A: Given the AT&T ruling, I think you are going to see lots of changes. I was a bit surprised [the Department of Justice] tried to block that deal. The judge's ruling really reflected that the dynamics have changed. It’s not about companies that produce content and companies that distribute. Its about big, vertically integrated tech companies. It remains to be seen. Someone will write a book about what [spurred] the initial investigation in the first place. How politically motivated was that?
Fox renews MLB rights as big tech remains on sidelines for major sports deals
Another major long-term sports deal just got inked, and television's grim reapers — the tech platforms — failed to deal a death blow to the TV ecosystem.
Fox said Thursday it has a new deal to extend its two-decade-long relationship with Major League Baseball by another seven years. Variety reports suggest Fox is paying $5.1 billion, which translates to a 30 percent rise over the previous deal.
Facebook acquired streaming rights for 25 weekday MLB games and Amazon acquired non-exclusive rights to Thursday Night Football, but tech players have not yet stepped up to write the big checks for exclusive rights.
Fox will win some additional streaming and social media rights in addition to its current TV license, but it appears that Amazon and any other tech platforms failed to swoop in and take MLB away from broadcast TV.
Patrick Crakes, a former senior vice president of programming at Fox Sports who is now a sports consultant, said: "If MLB thought a digital partner was viable/worth the risk they would not have agreed to the extensions. Truth is there's a lot of risk for leagues, teams and conferences in partnering with platforms."
MLB, which also has deals with ESPN and Turner, did however create something of a new digital window. Moments after the news of the new Fox deal broke, John Skipper's new venture, DAZN, shared news that it's creating a new live show hosting coverage of highlights of ongoing games. It's being described as akin to NFL’s "Red Zone" offering, which breaks into important moments in live games. Skipper, a former president of ESPN, is looking to grow DAZN into a new subscription sports venture, financed by billionaire Len Blavatnik.
Meanwhile Fox's tab for sports is ballooning.
* MLB $5.1 billion from 2021-2028
* NFL Thursday Night Football $3 billion from 2018-2022
* WWE $1 billion from 2019-2023
ABC News alums slam Trump in an open letter
A group of former ABC News employees, including former correspondents and executives, have added their names to an open letter denouncing President Donald Trump’s “sustained attack on the free press.”
“We denounce Donald Trump's behavior as unconstitutional, un-American and utterly unlawful and unseemly for the President of the United States and leader of the free world,” reads the letter, which had nearly 100 signatures on Facebook as of Tuesday afternoon.
The organizer, Meredith Wheeler, a former writer and producer who worked with several ABC News anchors, asked for members of an ABC News alumni Facebook group to share the letter with current employees and friends at other media outlets. She even suggested the possibility of crowdfunding to take out a full page article in The New York Times or The Washington Post.
The letter comes in response to the death of Washington Post columnist Jamal Khashoggi and Trump’s recent praise of Rep. Greg Gianforte, R-Mont., who assaulted Ben Jacobs, a reporter for The Guardian, last year after Jacobs asked a question about healthcare.
Several current ABC News employees contacted by NBC News expressed caution about putting their names on an open letter denouncing Trump, at least while they work in the news division.
But one insider said they would be willing to put their name on the letter, “depending on how it was presented within the organization.”
The current version of the letter, posted in the ABC News alumni Facebook group, reads:
"On the heels of the recent brutal murder of a The Washington Post journalist Jamal Khashoggi, President Donald Trump chose to celebrate the assault of The Guardian reporter Ben Jacobs by an American congressman—an attack that occurred while the journalist was simply doing his job, posing questions to a politician.
Montana Congressman Greg Gianforte (R) body-slammed Jacobs, knocking him to the ground and beating him severely enough to send him to the hospital. Although Gianforte pleaded guilty to a misdemeanor assault and was fined, the President of the United States praised this violent behavior at a Trump rally in Missoula, Montana, on October 18.
Trump’s condoning of political violence is part of a sustained pattern of attack on a free press—which includes labeling any
reportage he doesn’t like as “fake news” and barring reporters and news organizations whom he wishes to punish from press briefings and events.
One of the pillars of a free and open democracy is a vibrant free press.
At his inauguration the President of the United States swears to protect the U.S. Constitution, including the First Amendment.
This President is utterly failing to do so and actively working not simply to undermine the press, but to incite violence against it as well.
In a lawsuit filed by PEN, the writer’s organization, against Donald Trump, they charge him with violating the First Amendment. We, the undersigned, past and present members of the Fourth Estate, support this action.
We denounce Donald Trump's behavior as unconstitutional, un-American and utterly unlawful and unseemly for the President of the United States and leader of the free world."
Katzenberg reveals name of short-form video project
Jeffrey Katzenberg and Meg Whitman have revealed the name of their highly anticipated new short-form premium video platform: “Quibi.”
The name, a contraction of “Quick Bites,” hints at what Katzenberg and Whitman are trying to do: create high-quality, HBO-caliber content that people watch on their mobile devices in minute-long snippets.
Every major Hollywood studio has invested in the project, but there’s still a great deal of skepticism among Hollywood and Silicon Valley insiders over the viability of their effort. There is also little available evidence that consumers want to watch “quick bites” of shows like "Game of Thrones" or "Stranger Things” that have traditionally run for an hour.
In an appearance Wednesday at the Vanity Fair New Establishment Summit in Beverly Hills, both Katzenberg and Whitman sounded bullish about the demand for premium short-form.
“You’re looking at two old dogs,” Katzenberg said. “We got a new trick.”
Condé Nast loses another top executive in digital re-org
Fred Santarpia, Condé Nast's chief digital officer, is leaving the company, the executive said in a post on Instagram.
"From launching Conde Nast Entertainment's digital video business to leading the acquisitions of Pitchfork and Citizen Net, I’m proud of the lasting contributions we've made to one of the most iconic companies in all of media," Santarpia wrote on Tuesday.
"Unfortunately, there’s never a good time to say goodbye, but with the company’s digital foundation set, this is the right time for me to say farewell."
Santarpia, who had been with the company for seven years, is the latest executive from the luxury magazine house to depart in recent months after a round of reviews by outside consultants focused on cost cutting and re-organizing the company.
Other executives who have departed in recent months include Dawn Ostroff, the president of entertainment at Condé Nast, who joined Spotify as chief content officer. Her departure was announced in June.
Josh Stinchcomb, the former chief experience officer at Condé Nast also stepped down in August to join Dow Jones as chief revenue officer.
Condé Nast said it would sell Brides, Golf Digest and W magazine earlier this year. The company had been working with Boston Consulting Group, and had lost about $120 million in 2017, according to The New York Times.
Read the memo from Condé Nast chief executive Bob Sauerberg:
As Jonathan and I continue to align our core areas and functions of our business we are realizing how much this collaboration is benefiting both organizations.
Underpinning this success has been the collaboration between Co/lab and Condé Nast International’s product and technology teams. This has been 18 months in the making and has enabled the roll-out of Copilot as part of Condé Nast InternationaI’s platform Compass, which launched in Germany, France and in the coming weeks Italy.
This effort represents months of hard work by our people both here and around the world and signals the start of a new era, where our digital and technology innovation can have global impact. In the coming months, Condé Nast International will be lighting up 59 additional sites across the world on our single, global proprietary platform. And this is just the beginning.
We want to build on this success by formally mobilizing our product and technology organizations to work towards a set of common goals for both Condé Nast and Condé Nast International. By deepening our collaboration through the joint platform development, product and technology support, global supplier negotiations and the continued development of our Fashion Show products; we can unlock unlimited opportunities to scale our expertise and drive significant growth.
To that end, today we are announcing the joint leadership of our Product and Technology teams led by Ed Cudahy (Condé Nast) and Lee Wilkinson (Condé Nast International) who will report to Wolfgang Blau and me. They will lead their respective teams with the goal of closer collaboration of our technology function. This move presents a huge opportunity to create a Global Product and Technology team that will enable both companies to grow and thrive in the coming years. I want to congratulate our teams led by Ed and Lee on what they have achieved so far and what we will accomplish together in the future.
I also want to share with you that Fred Santarpia will be leaving us on November 2. Fred has been a great digital leader shepherding our nascent business through the continued development and iteration of Copilot and Spire and laying the cultural foundation from which we evolved. Through dramatic upgrades to our digital products and performance, the ability to scale and monetize our audience and the development of critical digital partnerships, he successfully helped pave the way for a cohesive global effort and we will build on that foundation. Before Fred leaves, we will be working with his leadership team to ensure a seamless transition and their continued impact on our business. Please join me in thanking Fred for his contributions and wishing him well.
I look forward to our continued collaboration with Wolfgang and the team at Condé Nast International as our collective expertise and capabilities are unmatched.
Showtime's David Nevins describes his own 'beach week'
CBS interim CEO Joe Ianniello is making sure he's showing support for his senior executives.
Ianniello, who was chief operating officer at CBS before taking over after the departure of Leslie Moonves, attended the annual Center for Communications lunch in honor of Showtime Network's CEO David Nevins on Thursday.
He was also out earlier this week attending an event honoring colleague Jo Ann Ross, president and chief advertising revenue officer.
Nevins, who has overseen hit shows such as "Homeland," "Billions" and "Ray Donovan," has been floated as a potential CEO candidate at CBS alongside Ianniello, according to Variety.
But if there was any competition between the two men, it wasn't evident at the lunch. The two shared several laughs sitting together at the same table, as "Homeland" actress Claire Danes said at the luncheon that she'd broken away from breastfeeding her newborn to speak to the audience. "Ray Donovan" star Liev Schreiber also joked that he'd soon be going back to filming in the rain in Yonkers.
The lunch wasn't as well attended as in previous years, with some media executives glued to the Senate hearing on Supreme Court nominee Brett Kavanaugh. The hearings kept CBS News President David Rhodes from attending the lunch.
Nevins said he was also from Bethesda, Maryland like Kavanaugh but went to public school. He referenced Kavanaugh's calendars joking that, "beach week" for him, meant "one night on my own in a car." Nevins also urged attendees to lend a hand to those less privileged and help them get their start in the entertainment business.
"TV is the last bastion of oral culture," he said, adding that millions of dollars get invested on the basis of a pitch.
Just a few hours later, CBS submitted SEC filings revealing that Gil Schwartz, CBS chief communications officer under Moonves, is retiring from the company with an exit package worth $7.3 million. Schwartz is also an author and wrote a long-running column for Fortune under the name "Stanley Bing."
Fox News fires contributor after 'reprehensible' comments about Kavanaugh accusers
Fox News on Thursday fired contributor Kevin Jackson after he called Dr. Christine Blasey Ford and other women "lying skanks" for accusing Supreme Court nominee Brett Kavanaugh of sexual misconduct.
Jackson, who has 67,000 followers on Twitter, posted a string of highly offensive tweets over a period of hours as the Senate Judiciary Committee interviewed Dr. Blasey Ford and then Brett Kavanaugh.
The conservative pundit and author, who as of Thursday night still identified himself in his Twitter bio as a Fox News contributor, tweeted: "Dang girl, stop opening your legs and OPEN A BOOK!”
He also tweeted: "Holy Cow, a woman suffering from PTSD hosts STUDENTS from Google. FBI please investigate SEX PARTIES at #ChristineBlaseyFord house."
He capped it off by saying that "Leftist women are skanky for the most part."
In a statement, Fox News said late Thursday: "Kevin Jackson has been terminated as a contributor. His comments on today's hearings were reprehensible and do not reflect the values of Fox News."
The firing comes just days after Fox News' Martha McCallum conducted an exclusive interview with Brett Kavanaugh on Sept. 24.
The topic of sexual assault is a delicate one for Fox News, part of 21st Century Fox, since its late CEO Roger Ailes and former anchor, Bill O'Reilly, exited the network after accusations against them. Both men denied the allegations.
Another Fox News personality, anchor Tucker Carlson, also questioned sex assault victims this week, saying in an segment with liberal radio host Ethan Bearman: "Sex offenders tend to commit serial sex crimes. Doesn't she have an obligation to tell someone to stop him from doing it if he is a fact a sex criminal? Where's her obligation here? What about the rest of us?"
That drew howls of protest from pressure group Media Matters which suggested an advertiser boycott.
HBO pivots away from live boxing
AT&T-owned HBO said on Thursday it would no longer program live boxing, at least in the short term.
The network said in a statement: "Going forward in 2019, we will be pivoting away from programming live boxing on HBO," adding that it could still look at events in the future.
"We're a storytelling platform. The future will see unscripted series, long-form documentary films, reality programming, sports journalism and event specials and more unique standout content from HBO Sports."
The news, first reported in The New York Times, suggested that live boxing wasn't a big reason that people subscribed to the premium TV service.
AT&T has said it will spend more money on programming, but also told Wall Street that it would find $1.5 billion in annual cost synergies within three years of the deal's close.
It also comes as other players are doubling down on combat sports with ESPN buying UFC rights in order to bring it to a more mainstream audience, and Fox Sports and Comcast sharing rights to WWE. Comcast owns NBC Universal, which is the parent company of NBC News.
Another service, DAZN, is also looking to spend serious money to compete in the sports world. The service, backed by billionaire Len Blavatnik and run by former ESPN president John Skipper, just offered a boxing match as part of a $9.99 monthly subscription — far cheaper than the typical pay-per-view price.
Fox sells its stake in Sky to Comcast
Rupert Murdoch’s 21st Century Fox said on Wednesday it would sell its shares in the U.K.-based pay-TV platform Sky to Comcast, removing any shadow of a doubt about the satellite broadcaster’s future ownership.
Comcast emerged as the winner of a recent auction for Sky, bidding around $40 billion for the satellite broadcaster, which has 23 million subscribers in Europe. Comcast owns NBCUniversal, which is the parent company of NBC News.
The winning bid left open a question as to whether Fox would opt to take the Comcast offer or remain a shareholder. Fox owned about 39 percent of Sky.
Fox’s decision-making process was run in conjunction with Disney, since Fox had pledged to sell its Sky stake as part of a separate deal to sell assets to Disney.
Confirmation of Murdoch’s decision to give up the stake ends an era for the global media entrepreneur, now aged 87. Murdoch, the executive chairman of Fox, had a hand in creating Sky when satellite TV was in its infancy.
Sky CEO Jeremy Darroch issued a statement saying: “Nearly 30 years ago Rupert Murdoch took a risk to launch Sky and in the process changed the way we watch television forever.”
Darroch added: “Our aim is to make the next 30 years as exciting for customers, colleagues and all our stakeholders.”
Sky owns sports rights including, Italy's Serie A soccer league, and England's Premiere League and the European Champions League. Sky also has new partnerships with Netflix, Spotify and Italian media company Mediaset.
In a statement, Fox said it had accepted roughly $15 billion for its shares after obtaining Disney’s consent. Comcast had secured 37 percent of Sky's shares as of Wednesday morning, according to a company spokesman.
The Fox stake gives Comcast more than 50 percent of Sky's shares. Sky shareholders have until Oct. 11 to accept the offering.
Fox confirmed the news of its stake sale and in said a statement: “We bet -- and almost lost -- the farm on launching a business that many didn’t think was such a good idea. Today, Sky is Europe’s leading entertainment company and a world-class example of a customer-driven enterprise.”
Just eight years ago, Fox (then known as News Corporation) made an $11.6 billion bid to control Sky. That was scuttled by a phone hacking scandal and scrutiny from the British government.
Comcast, meanwhile, becomes the biggest pay-TV provider in the world with 52 million homes. The acquisition also has the potential to create a global presence in news. Comcast will take control of Sky News and already owns Euronews, based in France, and NBC News and CNBC in the U.S.
Former managing director of Sky Ventures, James Ackerman, told NBC NEWS: “21st Century Fox transformed the media landscape in Britain in a way no other organization has since the creation of the BBC. This is a tremendous opportunity for Comcast (as a platform company) to diversify overseas and unlock further growth for their content divisions. And anyway, it’s about time [Murdoch] cashed out on something.”
AT&T believes in ad targeting and privacy: can the two coexist?
Is AT&T looking to establish a new national ad platform for the TV industry?
The company renamed its advanced advertising business on Tuesday with a promise to offer Madison Avenue something new — targeted advertising at scale. The new unit is called Xandr, after Alexander Graham Bell, who invented the telephone and established The Bell Telephone Company and the American Telephone and Telegraph Company.
AT&T acquired Time Warner’s content business for $85.4 with a stated intention of getting TV and online viewing data and marrying it with ad targeting capabilities — a combo the company says will allow it to charge more for its ad inventory.
Here’s how AT&T CEO Randall Stephenson explained it to Recode’s Peter Kafka.
In a statement about the new branding, the telecom giant noted that it has signed deals with regional cable companies Altice USA and Frontier Communications to aggregate and sell their national addressable TV advertising inventory.
Addressable advertising means ads that are targeted to identifiable consumers. TV and telecom firms have struggled to compete with internet companies simply because online players are much less regulated in what data they can share. “Xandr’s unique differentiator is its commitment to personalization," the company said in its statement.
Still, the departure of Oath CEO Tim Armstrong doesn’t bode well for that kind of data mash-up in the current political climate. Oath is part of Verizon.
In the press release, AT&T said: “This initial step starts to create the foundation of a national TV marketplace for advertisers and premium content publishers.”
With TV measurement firm Nielsen exploring a sale, it appears AT&T is making a bold effort to reshape video ad buying with its extensive data and distribution capabilities.
“I have not been exposed to many industries as reluctant to change as the media industry in terms of business models and changing how you deliver the product," Stephenson said. "It is an industry that has about as much inertia as any industry I’ve been part of.”
While the phone company wants to have a closer relationship with their customers and viewers, it’s not clear consumers — or politicians — feel the same way. Privacy remains a huge topic of public concern and the Senate Committee on Commerce, Science and Transportation has a hearing Wednesday about that very topic. The Los Angeles Times lays out who’s attending the high profile event: AT&T, Amazon, Google, Apple, Twitter and Charter Communications, but no consumer advocates.
Stevenson is arguing for the government to step in to regulate privacy, largely to avoid the states doing it themselves.
Craig Newmark backs news site to take on big tech
Craigslist founder Craig Newmark confirmed on Monday he is spending $20 million to back The Markup, a journalism project led by reporter Julia Angwin aimed at pointing out the serious deficiencies in tech platforms and their impact on society.
Angwin, a former Wall Street Journal reporter, most recently worked at ProPublica, where she looked at how Facebook ads could be used to exclude racial groups from housing, which is against the law. Here’s the story.
“The effects of foreign bad actors on our election, that’s been the most shocking to me,” Newmark said when asked about the most surprising negative effects of technology on society.
But rather than criticize the tech platforms, Newmark is choosing to play diplomat. He wants tech giants and the news media to play nice in order to fend off Russian interference in future elections.
“I can say first hand, a great deal of good is coming from all three major tech platforms," Newmark said. "I’m engaged in quiet diplomacy, getting together a platform of people with constructive critics of the platforms. I've been doing it for some years without much traction, but as I get a little louder, I’m becoming more effective.”
Newmark added: “I have a great deal of confidence in what Facebook, Google and Twitter are doing.”
Some might see some irony in journalism funding coming from Newmark, who also gave a $20 million gift to the CUNY Graduate School of Journalism. After all, Craigslist's free online bulletin board drew classified ads away from newspapers, helping kickstart a difficult run for print media that continues.
Newmark pushes back against that narrative, pointing to research that shows the newspaper industry has been in decline for decades.
John Skipper's DAZN looking to punch its way into OTT
Some people might know billionaire Len Blavatnik as the owner of Warner Music and France’s streaming music service Deezer, but he’s also behind a company attempting to upend the direct-to-consumer sports business.
Blavatnik, together with former ESPN president John Skipper, operate a company called Perform Group, which runs DAZN (pronounced "Da Zone"). The streaming service is getting its a big test this weekend, streaming its first major sports event — a boxing match between Anthony Joshua and Alexander Povetkin.
The service is $9.99 per month (first month is free) and offers live and on-demand streaming of boxing matches and mixed martial arts as well as other library programming. Joseph Markowski, head of DAZN North America, told The Query the company is aiming to compete with the pay-per-view boxing matches that typically cost $70 to $100. The streamer is advertising this weekend's match via digital media to win sign-ups.
“We’re not just competing with ESPN+, we’re competing with ESPN,” Markowski said.
He said the firm’s exclusive focus on streaming gives it a leg up versus other broadcasters who have to worry about cannibalizing their TV distribution revenue.
DAZN aims to be in the ring when it comes to negotiating for big sports rights when they are available, though Markowski declined to name any. He said DAZN has plans to grow well beyond its origins in the fighting realm, and we should expect to hear a lot more about their sports offering in the coming months.
Can it challenge a plethora of sports streamers already in the market both from the leagues and their TV partners as well as a possible move by a Facebook, Google or Amazon? Blavatnik’s pockets are pretty deep.