Pandora Competing In Local Radio Markets

Pandora Media Inc. recently opened its first sales office in Boston as the Internet music streaming company is aggressively competing with local radio stations for advertising dollars.

According to boston.com, Pandora has 29 sales offices in major markets such as Chicago, New York, and Los Angeles, and plans more this year, in an effort to boost revenue and pay the artist royalties that run into the millions of dollars each year.

Pandora’s free service lets users create customized channels based on musical tastes. Despite being the largest music streaming service in the United States and adding listeners, Pandora is losing money — a lot of money. Last year, it posted a net loss of $38 million.

Being in Boston could help lower those losses, if the company can convince longtime radio advertisers such as car dealers or furniture sellers that advertising on an Internet station is more effective than marketing over the airwaves.

So far, local radio executives don’t appear to be too worried about Pandora showing up on their turf to compete for a share of the local advertising market valued around $15 billion.

“Pandora doesn’t compete directly with broadcast radio nationally or locally because it’s not radio in the real sense of the word,” said Tim Castelli, president of national sales for Clear Channel Communications Inc., which owns several stations in Boston.

“Pandora is a play-list creator, which means it can’t deliver what makes radio — the rich personal and interactive experience that radio brings its listeners,” he said.

Read More Now.