Tim Westergren: ‘Sessions Live is gamifying livestreaming’
Ex-Pandora founder and CEO Tim Westergren has unfinished business. Despite co-founding the US’s largest music streaming provider – and changing the face of radio and streaming in the process – with his new venture, Westergren is hoping to achieve what Pandora couldn’t: a business model that generates meaningful income for artists.
Powered by that motivating factor, Westergren, along with serial game entrepreneur Gordon Su, launched Sessions Live in April 2020.
The livestreaming service utilises aspects of the gaming business model in order to shift the entire economic equation for the average working musicians – and it seems to be paying off.
Below, Westergren tells IQ how Sessions Live is learning from Pandora’s mistakes, why he’s injecting $75,000,000 into a marketing fund for musicians and what he believes the competition is doing wrong.
IQ: What is the modus operandi of Sessions Live?
TW: I spent a lot of time in digital music and there’s still this unsolved problem in the industry of how to bring compensation to musicians. There are a lot of successful services that generate a fair bit of money but there hasn’t been a platform – including my alma mater, Pandora – that is actually generating significant income for the average working musician.
It seems like it’s always feast or famine and the spoils of the industry go to a very select few – to the companies and the shareholders of those companies. We tried [to avoid that] at Pandora but, like most other companies, the business just wasn’t structured to generate meaningful income for musicians. Solving that problem has been the motivating factor for me.
I met my co-founders a couple of years ago, who come from the gaming side, where they really figured out how to generate income for lots of people. After a long discussion and a lot of brainstorming, we realised that if we took a lot of the learnings in gaming and brought them into music, in the context of live streaming, we could create a platform that would generate significant engineering revenue for a large population of artists – and it’s proving to be true.
“What gaming has really mastered is turning engagement into money”
What exactly are those learnings from gaming and how do they manifest in Sessions Live?
What gaming has really mastered is turning engagement into money. Music has been notably bad at that. People spend a lot of time listening to music but don’t pay a lot of money to the creators. The genius of gaming is how you turn engagement into a game and make paying part of that game.
There are lots of different ways that gaming companies have managed to translate time spent into a sort of ongoing patronage. It’s really about understanding those dynamics. It’s an art to turn an audience of 200 people into a kind of social gaming experience where value is trading hands. That’s really what my co-founders understand; how you set up the environment, how you create payment mechanisms, how you create competition, and how you create a sort of status and various things that people will pay for, in addition to communication. And that’s what really makes Sessions Live hum.
“It’s an art to turn an audience of 200 people into a kind of social gaming experience where value is trading hands”
How does Sessions Live turn engagement into money for artists?
We call it ‘giving love’. You spend money to have a basket of love that you can give in the form of emojis – whether it’s sending a bouquet of flowers or a trophy or applause. The mechanism itself is a form of gaming. There’s engagement too so when people are watching they can request songs or that can be something that somebody pays for. If you’ve got a very active audience that is chatting and communicating a lot, you can auction the ability to chat.
We’ve seen some amazing results when you have an artist whose fanbase just really wants to talk to them. We had an artist who had 4,500 paid chats in one hour – people wanting to spend small amounts of money to have their chat show up so the artist would see. We have competitions where the artists perform and it’s about who generates the most love during their performance but it’s not just the Battle of the Bands but a battle of the fans.
“We had one band make $350,000 in an hour”
What are the primary sources of revenue for Sessions Live?
Sessions Live usually takes a 25–30% commission of all revenue. There are two primary forms of revenue: digital ticketing which is kind of a commodity which a lot of people are doing and then there’s giving ‘love’. We generate more money from the latter.
How much has the platform grown since you launched in April 2020?
We now get about 3,000 artists performing a week and that number is growing very rapidly. We’re adding around 600 artists a week at the moment and their earnings are going up too. Right now, the average musician across that entire population earns a lot more than an Uber driver earns in a year. That’s kind of poetic because one of the things people used to say is ‘something’s wrong when a musician can make more money as an Uber driver than as a performer’ – which has been true for a long time. We’re seeing artists making anywhere from $50, $100 an hour to literally hundreds of 1,000s of dollars in a single hour. We had one band make $350,000 in an hour.
The other really exciting part of this platform it’s global. We’re in more than 200 countries and our musicians come from everywhere. I think only 20% of the artists are in the US. So there are artists living in rural India and Sub-Saharan Africa and are earning US dollars, which, in the local economy is worth way more and so the actual financial impact of that is tenfold what it would be for someone in a developed country.
“There are a lot of livestreaming tools around… but that doesn’t matter if people aren’t watching”
The livestreaming market has become rife with competition since the pandemic hit. What sets Sessions apart?
I think that what artists have learned the hard way over the last 10–13 years is that there are a lot of livestreaming tools around – Facebook Live, Instagram, Twitch, Veeps, etc – that offer all the capabilities to stream. But that doesn’t matter if people aren’t watching. And if you don’t have an audience, you’re just a tree falling in the forest.
The question every musician should be asking any site that contacts them about live streaming is: ‘What are you going to do to market the show?’. And if they’re not going to market it you have to be very sober with yourself and ask: ‘Are we capable of doing that ourselves?’. I think the answer for most bands is they can’t afford to do it. They could bring people but they’d spend more bringing them they would then they would make on the event. And so, there are bands for whom the formula works but I think that this space has been much more characterised by streams that just don’t pay for themselves. Facebook Live and Twitch have gargantuan volumes of people playing and no one’s there.
“We’re actually spending money to market every show”
Is this an issue you’re hoping to address with the $75,000,000 marketing fund for musicians Sessions recently launched?
Yes. There has been a wave of streaming in the last year with Covid in particular but I think, for most musicians, livestreaming has been an unsuccessful experience. I think that’s largely because people don’t show up and the artists don’t make money from it. So, there are a lot of artists who stream once and don’t do it again. We’re actually spending money to market every show. Underneath this whole system is a growth engine – a software that was built 15 years ago and has been optimising and learning for a long time that enables us to find fans really efficiently for artists. That’s how artists start making money because you can’t make money if no one’s there. We’ve also committed to driving one billion-plus impressions to the platform within six months.
“Livestreaming doesn’t involve jumping in a van and driving 1,500 miles or spending six hours setting up and breaking down”
What kind of value will Sessions Live provide to artists once touring has restarted?
I think artists who have really healthy touring careers will go back to that and hopefully, a portion of them will understand that touring and livestreaming can coexist. But for the thousands of artists that we are currently hosting who don’t have the opportunity to play in clubs, it’ll be no different so I’m not concerned at all about that.
I do think we’ll hear more artists say ‘we made this much money last weekend when we streamed from our trailer or ‘we were rehearsing and then we just did a live stream after in the rehearsal’. It’s a really easy, lucrative thing to do and it doesn’t involve jumping in a van and driving 1,500 miles or spending six hours setting up and breaking down at a club. Furthermore – maybe more importantly – it’s a great marketing vehicle because there are so many things you can do with a live stream that help your career writ large. It’s not just about the live stream itself, it’s a way to introduce new material and connect directly to fans.
The other thing about performing live is that it’s geographically constrained obviously so if you play a club in Atlanta, you have to fill the club with people who live in Atlanta. And that means that you have to have a lot of fans in Atlanta. And it takes a long time for bands to build up audiences that are large enough to fill a local venue. The great benefit of a virtual venue is you can fill it with 300 people from all over the world so you don’t need to have that kind of fan density. It’s not an easy jump from online to the physical world but I think people will be able to build healthy sustainable careers just virtually performing.
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SiriusXM’s Pandora partners with Ticketmaster
Pandora, the streaming service owned by Liberty Media’s SiriusXM, has announced a new partnership with ticketing giant Ticketmaster.
Pandora sold ticketing business Ticketfly to Eventbrite in June 2017, prior to its US$3.5 billion acquisition by SiriusXM. Liberty Media, whose chief executive Greg Maffei is Live Nation’s chairman, owns a 71% share in SiriusXM and a 34% in Ticketmaster owner Live Nation.
Ticketmaster has now been integrated into Pandora’s AMP platform for artists, which enables the promotion live events alongside music streaming. The platform will use Ticketmaster’s concert data to provide more accurate and up-to-date information on live events.
“In our ongoing effort to provide a comprehensive and seamless artist marketing experience, Pandora has partnered with Ticketmaster to transform live event promotion,” says a Pandora statement.
“Powered by touring data pulled in real-time from Ticketmaster, this new partnership makes communicating with fans about live events easier than ever before”
“Powered by touring data pulled in real-time from Ticketmaster, this new partnership makes communicating with fans about live events easier than ever before. Fans will now be notified of upcoming show announces and on-sale ticket alerts based on their location and listener history,” reads the statement.
According to Pandora, listeners have already clicked on links to Ticketmaster events over 700,000 times following the integration.
The integration of ticketing platforms into live-focused streaming platform features was discussed at the streaming workshop at ILMC 31. Streaming giant Spotify uses ticketing partners Ticketmaster, Songkick, Eventbrite and AXS to promote events.
Ticketmaster has also integrated with YouTube in the United States, using the platform’s geolocations to target nearby and relevant shows to listeners.
Pandora and Live Nation ‘brought together’ by SiriusXM deal
SiriusXM has created the “world’s largest audio entertainment company” by acquiring internet radio/streaming service Pandora Media, the US satellite radio giant said today, in news that is likely to reignite speculation about a potential merger with Live Nation.
The acquisition – an all-stock deal worth US$3.5bn – will “capitalise on cross-promotion opportunities between SiriusXM’s base of more than 36m subscribers across North America and 23m-plus annual trial listeners and Pandora’s more than 70m monthly active users” – the largest digital audio audience in the US, according to a joint statement. The new company expects to turn over more than $7bn in 2018, with “strong, long-term growth opportunities” predicted for the years ahead.
SiriusXM originally invested $480m in loss-making Pandora last June, concurrent with the company offloading Ticketfly to Eventbrite in a return to its “core priorities”.
Commenting on the merger, Jim Meyer, CEO of SiriusXM, says: “We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora’s strategic progress and stronger execution. We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses.
“There are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses”
“The addition of Pandora diversifies SiriusXM’s revenue streams with the US’s largest ad-supported audio offering, broadens our technical capabilities and represents an exciting next step in our efforts to expand our reach out of the car even further. Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists and the broader content communities.
“Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”
SiriusXM – 71% owned by Liberty Media Corporation – has long been the subject of rumours it could take over, or merge with, Live Nation, in which Liberty holds a 34% stake. Greg Maffei, CEO of Liberty Media, said in said in May that the company may look at “ways to have them [SiriusXM and Live Nation] work together”, and many analysts espoused the potential benefits of a Live Nation/Ticketmaster–SiriusXM merger, which Citigroup’s Jason Bazinet says would create a “vertically integrated music titan”.
Brandon Ross, of BTIG Research – who said as long ago as June 2016 that Live Nation, SiriusXM and Pandora “could act as a powerful end-to-end music distribution platform from live music to streaming music and radio” – suggested in July that an acquisition of Live Nation by SiriusXM in on the cards. SiriusXM’s CFO, David Grear, however, soon poured cold water on the rumours, saying he’s “not certain they have much to do with reality”.
“This could be anti-competitive in the concert industry – or not”
In an investor call yesterday, Ross was again banging the drum for a SiriusXM–Live Nation merger, asking Meyer (pictured) whether “Live Nation together with these assets [SiriusXM and Pandora] makes more sense than what one carries just as a standalone company”, although the CEO declined to comment.
Speaking to Slate, David Lowery, a music business lecturer at the University of Georgia, says he also sees deeper integration for the three brands in future, with today’s deal “effectively bring[ing] these three companies together”.
Lowery – also the founder of alt-rock bands Camper Van Beethoven and Cracker – adds that only time will tell if the acquisition has a significant impact on the live music business. “This could be anti-competitive in the concert industry – or not,” he comments. “For instance, my bands enjoy significant SiriusXM play. Cross-promotion could enhance revenues of many mid-tier artists. But honestly that’s an unknown.”
Following news of the acquisition, Pandora’s shares jumped 8.6% to $9.88, although they have since fallen to $8.98.
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Eventbrite finalises $200m Ticketfly acquisition
Eventbrite has completed its acquisition of Ticketfly from Pandora, establishing a combined ticketing/event technology platform it says will process more than 200 million tickets to 3m+ events globally and generate US$4bn in gross ticket sales this year alone.
The US$200m acquisition of US-based Ticketfly, announced in June, is Eventbrite’s third this year and seventh in total, and follows the buy-out of European market leader Ticketscript in January.
Julia Hartz, the company’s co-founder and CEO, says the acquisition of Ticketfly – which works with almost 2,000 promoters and venues in North America, including the Bowery Ballroom in New York, the Troubadour in Los Angeles and Pitchfork Music Festival in Chicago – enables Eventbrite to offer a “market-defining solution for independent venues, promoters and festivals”.
“The union of Eventbrite and Ticketfly changes the game for the music industry,” she comments. “Our respective customers will benefit immensely from access to the best of what each company brings to the table.
“Eventbrite’s proven track record of innovation and global scale, combined with Ticketfly’s deep industry relationships and domain expertise, is underpinned by a shared commitment to independence and unparallelled service to our customers.”
“This deal brings together the two most progressive live event technology companies”
As previously reported, Ticketfly founder Andrew Dreskin joins Eventbrite as head of music, where will continue to work with former owner Pandora to deliver in-app concert recommendations, a feature rolled out in July last year. Eventbrite, meanwhile, has existing partnerships with Facebook, Spotify and concert-recommendation service Bandsintown.
“We are happy to be teaming up with our friends at Eventbrite,” says Dreskin. “This deal brings together the two most progressive live event technology companies to form a powerhouse for independent music venues and promoters the world over. We will combine the best of both our platforms into one game-changing solution, the likes of which has never before been seen.
“This is going to be a heck of a lot of fun!”
Eventbrite, headquartered in San Francisco but with local operations globally, bills itself as the largest independent ticketing company in the world by number of organisers and events.
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Pandora sheds Ticketfly in return to “core priorities”
Ending weeks of speculation, Pandora Media has announced the sale of Ticketfly, the ticketing business it acquired for US$450 million in October 2015, as it refocuses its on its core subscription music-streaming service.
The buyer: Eventbrite, which has paid $200m – $150m cash and $50 in a note payable to Pandora – to make Ticketfly its third major acquisition of the year (after Ticketscript in January and US start-up Nvite in April).
Ticketfly grew substantially under Pandora ownership, increasing turnover 25% in Q1 2017 and by the same amount across 2016 as a whole. Its founder and CEO, Andrew Dreskin, will now lead Eventbrite’s music efforts.
“We are happy to be joining forces with our friends at Eventbrite,” he comments. “Ticketfly and Eventbrite are the two most progressive live events technology companies out there, and together we will create a transformational platform that will be game-changing for independent venues and promoters.”
“We plan to build on the great work that Ticketfly and Pandora have done and offer the benefits of that partnership to Eventbrite’s customers”
Dreskin (pictured) says Ticketfly/Eventbrite will continue to work with Pandora to deliver in-app concert recommendations, a feature rolled out in July last year. “We plan to build on the great work that Ticketfly and Pandora have done and offer the benefits of that partnership to Eventbrite’s customers, delivering even more live event notifications to Pandora listeners,” he adds.
The sale of Ticketfly comes as satellite radio service SiriusXM – a division of Liberty Media, which owns a third of Live Nation – invests $480m in Pandora, which has struggled to stem its massive quarter-on-quarter losses ($132.3m in Q1 2017).
Liberty Media CEO Greg Maffei, also chairman of the board of Live Nation, says the investment reflects SiriusXM’s desire to move into ad-supported digital radio.
“Liberty Media has long recognised the strength of the Pandora brand and the opportunities in the ad-supported digital radio market,” he says. “We are very supportive of SiriusXM’s strategic investment.”
Pandora ‘to sell Ticketfly’, focus on streaming
Pandora Media is reportedly seeking to offload Ticketfly less than two years after it bought the ticketing platform for US$450 million.
Despite delivering growth of 25% in its full year under Pandora ownership, Bloomberg suggests Ticketfly, acquired in October 2015, is now on the chopping block as the company seeks to concentrate on its music-streaming business.
Pandora, which last week restructured its board and welcomed $150m in new investment from private-equity firm KKR, is rumoured to be seeking a buyer for the entire company amid ever-increasing losses ($132.3m in Q1 2017) and a tumbling stock price.
According to Bloomberg, several Pandora investors, including hedge fund Corvex Management, have questioned Pandora’s growth strategy and its foray into ticketing, which in the US is dominated by Live Nation’s Ticketmaster.
Pandora last July rejected a takeover offer by Greg Maffei’s Liberty Media, which owns roughly a third of Live Nation. Reports suggested its board felt the company was worth closer to $20 per share, rather than the $15 offered by Liberty; today it is $9.72. The New York Post suggested yesterday the deal is back on.
$150m for ‘for-sale’ Pandora as Ticketfly up 25%
Ticketfly’s turnover increased 25% in the first financial quarter (Q1) of 2017, with ticketing once again proving the most consistent source of growth for troubled parent company Pandora.
Pandora’s ‘ticketing service’ revenues grew to US$27.8 million, roughly 9% of the internet radio/streaming giant’s total turnover of $316m – which grew 6.3% year on year, although losses also widened from $115.1m to $132.3m.
Primary ticketing platform Ticketfly, founded by Andrew Dreskin (ex-TicketWeb), grew revenue 25%, to $86.6m, in 2016 – its first full year as a division of Pandora Media.
The release of its latest set of financials comes amid the injection of $150m of new capital into Pandora by private-equity firm KKR (the same company which helped finance William Morris’s acquisition of Ultimate Fighting Championship). “We are excited to support the long-term growth of Pandora with this investment,” comments KKR’s Richard Sarnoff, who joins the company’s board. “A true pioneer in digital music, we believe that Pandora is uniquely positioned over the long term given the sheer size of its user base, the quality of its new subscription services and the fact that it has created one of the few scaled streaming-media businesses in the US.”
“We are excited to support the long-term growth of Pandora with this investment”
It has been speculated, however, that Pandora is targeting an acquisition within the next 30 days – before the KKR deal comes into force. “Sources familiar with the company’s thinking” tell CNBC that its leadership sees the investment as an “insurance policy of sorts that effectively gives the company a 30-day option to sell itself – which it thinks it can do.”
Pandora concurrently announced a restructuring of its board, setting up an independent committee chaired by independent director Tim Leiweke (the ex-AEG CEO who now runs Oak View Group) to identify “additional expertise and leadership as the company moves forward”.
At the time of writing, its share price had fallen to $9.90, from an all-time high of $37.42 in February 2014 – during which time its streaming business has been eclipsed by on-demand rivals such as Spotify and Apple Music, despite the recent launch of its own Premium platform.
Pandora last July rejected a takeover offer by Greg Maffei’s Liberty Media, which owns roughly a third of Live Nation. Reports suggested its board felt the company was worth closer to $20 per share, rather than the $15 offered by Liberty.
Strong Ticketfly growth in 1st year under Pandora
Ticketfly grew year-on-year revenue 25%, to US$86.6 million, in its first full year as a division of Pandora Media.
Bolstered by the addition of several high-profile new partners, including the Mercury Lounge and Bowery Ballroom in New York, independent promoter Jam Productions and a host of venues and promoters in the American south, Ticketfly outpaced growth at Pandora group as a whole, which increased turnover 19% to $1.4 billion.
Ticketing is a key component in Pandora’s (vaguely Soviet-sounding) ‘five-year plan’ to grow revenue to $4bn by 2020. “We will continue to optimise our ticketing capability, bringing unique enhanced functionality to our listeners, while combining our live event sponsorship and our powerful sales team and infrastructure to build towards a $300m-plus revenue opportunity in the next five years,” it reads.
Pandora in June began pushing listeners of its internet radio service – which makes up the bulk of its turnover – to Ticketfly via “hyper-personalised concert recommendations” in a bid to diversify its revenue streams.
“We enter 2017 laser-focused on … an artist-to-fan platform to drive listener engagement and ticket sales”
Despite seemingly steady growth for Pandora, its losses continue to widen, more than doubling to $343m in 2016. Active listeners fell slightly last year, while the cost of paying rightsholders increased by $124m to $734.4m.
Commenting on its 2016 results, Pandora founder and CEO Tim Westergren says: “We made significant progress in 2016 by driving leverage in our core business while accelerating subscriptions to our paid product.
“We enter 2017 laser-focused on the growth of our ad-supported business, the launch and growth of our subscription products and an artist-to-fan platform to drive listener engagement and ticket sales. These three strategic pillars operate in harmony to create mutually reinforcing revenue streams across a large and growing addressable market.”
Pandora bought Ticketfly for $450m in October 2015.
Ticketfly revenue up as Pandora losses mount
Pandora’s much-hyped US$450 million acquisition of Ticketfly in October 2015 is showing a growing return according to the company’s third-quarter (Q3) 2016 financial results, which show a 25% year-on-year hike in revenues from the ticketing service.
Ticketfly signed up a number of new partners in Q3, including promoter/venue operator Jam Productions, three festivals, ice-hockey team Shreveport Mudbugs and 12 US venues. The company’s turnover stood at $22.085m in the three months ending 30 September, while it reported $22.771m in Q2 and $22.265m in Q1.
No profit figures are available for Ticketfly specifically, but Pandora as a whole – which comprises Pandora proper (an internet radio and recently launched on-demand streaming service), Ticketfly, analytics business Next Big Sound and former rival radio service Rdio, which went bankrupt in November – lost $55.2m in Q3, bringing its to-date 2016 losses to an eye-watering $236.5m.
“”Pandora’s transformation continues with the launch of compelling new products and partnerships that open up significant revenue streams”
Overall revenue, however, increased to $351.9m – up 13% year on year.
Pandora’s founder and CEO, Tim Westergren (pictured), is confident in the company’s eventual “transformation” into a profitable entity through bringing music streaming/radio and live events under one roof, as evidenced by its recent integration of Ticketfly sales and concert recommendations into the Pandora radio platform.
“Pandora’s transformation continues with the launch of compelling new products and partnerships that open up significant revenue streams,” he told investors yesterday. “Only Pandora is uniquely positioned to create deeply personalised and easy-to-use listening experiences that delight and engage listeners. A great product that’s effectively monetised is the cornerstone of success in digital music streaming.”
Ex-Ticketfly exec to lead US StreetTeam operation
StreetTeam has poached Ticketfly’s Jeff Kreinik to head up an expansion into North America.
Kreinek, formerly head of festivals at the Pandora-owned primary ticket agency, will focus on growing the company’s presence in the US and Canada as its new vice-president of live entertainment for North America.
StreetTeam, a peer-to-peer (P2P) live event marketing platform which earlier this month secured US$10 million in funding from Universal Music Group and other investors, has sold more than 200,000 tickets since its formation in March this year. Its business model is based on rewarding ‘advocates’ – people who sell its clients’ tickets and products to their friends – with prizes including free tickets, VIP access and the opportunity to meet performers.
“Peer-to-peer is a great sales channel but many events still struggle to sell enough tickets, so there’s a real need for software that can drive peer-to-peer sales at scale. StreetTeam makes that quick and easy”
It has more than 60 festival clients, including Bonnaroo, Voodoo, Bestival, Reading Festival, Life Is Beautiful and Electric Zoo, through agreements with promoters such as ID&T/SFX Entertainment and Live Nation.
“I’m delighted to join StreetTeam and return to my roots in marketing,” said Kreinik, who prior to joining Ticketfly served spells at Front Gate Tickets and New Orleans-based promoter Huka Entertainment. “Peer-to-peer is a great sales channel but many events still struggle to sell enough tickets, so there’s a real need for software that can drive peer-to-peer sales at scale. StreetTeam makes that quick and easy, so I’m proud to help hasten its adoption across the US and Canada.”
StreetTeam co-founder Liam Negus-Fancey adds: “We’re excited to welcome Jeff on board and to strengthen our commitment to the live entertainment sector in North America. Jeff has an exceptional track record and his experience growing successful companies such as TicketFly makes him a powerful addition to our team.”