Brian McAndrews is out as CEO and president of Pandora, where he served since 2013. He has been replaced by company founder Tim Westergren.
McAndrews, who has a long history in digital advertising, departs at a time when Pandora faces major growth challenges in the intensely competitive music streaming space.
While McAndrews brought a long résumé in the digital advertising and ad tech arena (he founded and ran aQuantive, which Microsoft purchased in 2007 for $6.3 billion), Pandora’s users have declined by 400,000, according to Bloomberg News, and it continues to face stiff competition from Apple Music, Spotify and others. Its stock has plummeted 18% this year.
There wasn’t a lot of optimism that Pandora’s listener growth rates would flourish in 2016. McAndrews declined to provide forecasts during Pandora’s Q4 earnings call in February, noting that he wasn’t expecting significant growth “because of the competitive environment and continued existence of free on-demand services and significant competitive spending.”
He added that Pandora was investing to maintain growth and expected more engagement.
In the face of the competition McAndrews described, Pandora has tried to evolve. During that same earnings call, he noted how he wanted to transform Pandora into a “go-to music destination,” combining its legacy Internet radio capabilities with on-demand streaming and live music via its October acquisition of Ticketfly. It would be a few years, however, before these capabilities, particularly its on-demand streaming, started driving meaningful revenue for Pandora.
And while Pandora painted a cheerful picture around its ad sales – its Q4 2015 ad revenue was $269 million, up 22% YoY – competitors like Spotify have actively built out ad products designed to take advantage of the audio medium. While Spotify has connected the pipes to enable programmatic buying of audio inventory, for instance, Pandora still focuses on display.
In a previous interview with AdExchanger, Pandora CRO John Trimble said programmatic audio was “not something I feel like we have to be there tomorrow with.”
Pandora’s future remains unclear.
While the company hopes to drive over $4 billion in US revenue in five years, according to Bloomberg News, it has hired Morgan Stanley to arrange a sale of the company.
McAndrews’ departure comes with other strategic management shifts. CFO Mike Herring will take on McAndrew’s role as president. Sara Clemens will become COO and will manage Ticketfly. Chris Philips has been named chief product officer.
AdExchanger will have more Tuesday on Pandora’s ad sales imperative in the wake of this management shakeout.
