Industry Insider: Pandora Founder Tim Westergren On New Company Sessions, How Artists Can Make Real Money From Live Streaming

Tim Westergren is a name most music industry observers should know by now. He conceived the music genome project with Will Glaser in 1999 to describe and categorize songs with a complex algorithm and hundreds of different attributes. This then served as the basis for Pandora, a company that revolutionized music consumption in the digital age, allowing for users to pick the type of music they want to listen to without the need of radio. The beginning of on-demand streaming services like Spotify changed the landscape and economics of digital music, but Pandora helped pave the way for changing consumption habits.

Westergren stepped down as CEO of Pandora in 2017, joining VC firm Khosla Ventures as a venture partner and founding a new company Next Music. Now he has his new challenge Sessions that happens to align with the world we live in.

Sessions is a music live streaming platform where artists can host and perform their own live streamed performances to fans. It allows for ticketed shows or direct fan to artist payments, something that Tim Westergren emphasizes is vital to any real revenue for artists. In addition to the direct payments, Sessions also provides some marketing for artists who do their streams through the platform. In the next six months, the company says they are committed to getting artists one billion impressions.

The idea for the company was created before the pandemic as the need for viable alternatives for touring has been there for a long time, but COVID has sped up the timeline for many artists. Live music has been how a lot of musicians earn their income, but for many, touring can also be difficult to make much money between travel, renting gear, crew, additional production and more. Then there is the mental and physical toll that touring takes on artists.

Live streaming, if done right and monetized, can allow artists to make some money for playing music, without having to hit the road. We chat with Westergren about the need for live streaming in the age of social distancing and beyond, how it can be effectively monetized and lessons learned from his time at Pandora for a new Industry Insider feature.

Did the idea for Sessions come about from the pandemic or was it something that had been floating around for some time?

The idea of Sessions, just like the problem we’re trying to solve, long predates COVID, and will be there long after COVID is gone. The modern music industry is not structured to sustain working musicians. I’ve been trying to figure out how to change the economic equation for working musicians for over two decades. It was the fortuitous meeting with Gordon and his team, and the capabilities they had developed in gaming that opened up the opportunity to actually do it.

Who have been some big success stories from Sessions so far?

What actually excites me more than individual success stories, of which there are many, is the phenomenon of a growing contingent of working musicians who came to sessions with no fans and are now making hundreds of dollars an hour. They’re quitting their jobs and for the first time in their lives can entertain the dream of making a living doing what they love most.

How do artists get paid and what is your cut?

Artists make money from digital ticketing and through in-stream micro-transactions. Sessions receives 30% of the revenue.

How does discoverability work on Sessions?

Fans arrive for a specific show through Sessions’ promotional engine, then like a fan wandering a festival, start discovering other artists playing at that time. As we understand our fans and performers better we will become much better at pointing people to the best show for each listener.

Do you see live streams being a viable revenue stream for artists and venues once live music does come back?

Absolutely. Even at full capacity, the live performance world sustains only a small sliver of working musicians. When combined with Sessions promotion engine, Live streaming represents an unprecedented opportunity for artists to make substantial and enduring income to compliment what they can earn playing live shows. Already, more experienced musicians are making more money from a single live stream than they did selling out sizable clubs in their home markets.

How can artists beat “stream fatigue” and actually stand out, especially when they are on a very tight budget and likely getting tighter with worries about rent, food and utilities?

An artist’s ability to play frequently is ultimately dependent on the scale and efficiency of promotion. The larger the audience the more often they can comfortably play. Sessions is unique in its ability to provide this promotion. And we do it at no cost to the artist.

Some musicians have come to really enjoy this break away from the hell that touring can be (travel, stress of gigs, lack of sleep, loneliness). Do you think live streaming will be mixed in with regular touring in the future to add more balance?

I spent years on the road myself, so I get the feeling! I have no doubt that live streaming will become not only a permanent fixture in the careers of musicians, it will also be a key source of audience and event marketing to support their career more broadly.

Many think touring is quite lucrative, but often artists go into debt trying to service a tour. Could live streaming gigs to paying fans be a way to make shows profitable for the non-1%?

There is definitely a misperception about the economics of touring. While there’s nothing like the euphoria of a great live show, breaking even on a tour is a victory for most artists. That’s why figuring out live streaming is so important. Not only is the topline revenue comparable, if not greater than a live show, the profitability is far higher as there is none of the overhead usually associated with a live performance. We had an artist make $10,000 in a show with just 300 fans in attendance. This same artist couldn’t book a coffee house in the physical world because they lack the fan density. Live streaming solves that, thereby enabling an artist to host a successful show long before they have the kind of fan base you need for a viable club date.

What lessons did you learn from Pandora about serving artists that you take to Sessions?

Probably the most important lesson I learned is that a large platform, even a well-monetized one that shares its revenue generously with creators is not going to make a material difference in the livelihoods of working musicians. The business model simply doesn’t support it. There is only one way for an artist to make real revenue and that is by having a direct payment relationship with a fan base combined with an effective mechanism for the fan to patronize the artist and a promotional engine to bring the audience. That is Sessions.

The other main driver of income (for some) is supposed to be streaming. How can streaming be more financially friendly to artists beyond the obvious raising streaming payouts?

Artists looking to Spotify, Apple or Pandora to solve their financial situation will be disappointed. The math simply doesn’t work. And that’s not because these aren’t well-run companies. They are very efficient revenue generators, and they pay out generously to artists. It’s a simple reality of the business model. Artists have to own their own audience and utilize direct monetization tools. That’s why live performance has been such a cornerstone of artist careers. They have a direct fan relationship and a direct monetization tool, the concert ticket. Sessions elevates that to a new level by weaving gamification and virtual monetization into the experience. So the ticket sale is just the beginning. Most of the income is made during the show through real time microtransactions.

How did you get into the music business? Plot your path in it.

I fell in love with the piano at age six. Music became my passion. I started writing and recording in my teens, studied music in college and started playing in bands right after graduation. After ten years I got road weary and started working as a film composer – that’s where I hatched the idea for the Music Genome Project, which became Pandora.

What do you look for in employees at Sessions?

Smart, hardworking team players with a passion for what we’re doing.

What is your advice for people looking to change career paths within the music business when often jobs seem to require experience in that specific field (like label side or media to publishing)?

Go for it. The truth is that digital music is a young industry. It won’t take long for you to catch up if you really try.