01/15/2012 10:59 am ET Updated Mar 16, 2012

The Lost Audience: Pandora Founder On Music Discovery

According to Billboard, in 2008, fully 106,000 albums -- collections of sound recordings with a UPC ("bar code") number -- became available. This number went down 10 percent the year after that, and about 25 percent last year, but 2010 still put 75,000 recordings into circulation. (Figures for 2012 aren't quite out yet). Estimate an average of 11 songs an album, it comes to about 825,000 songs. That's a lot of music.

Of course, 60,000 of those albums accounted for less than 1 percent of the number of records sold, and those 60,000 sold between one and 100 copies (averaging about 13.5). Since this all data comes from Sound Scan, though, it should be taken with a grain of salt. The company doesn't count many of the sound recordings sold at shows, for instance, unless the artist makes an effort to get them the news and numbers. And why would they? The transactions are mostly cash, and that often turns into an instant per diem -- it's what they eat and live on while on the road. It's hard for the IRS to track cash, and at this volume, they don't put too much effort into it.

But how many of those 60,000 sound recordings could have become your next favorite? Given access to one of these albums that matched your tastes, you might find an artist who could be a star, at least in your world.

Even in the days when 20,000 albums came out, only 0.5 percent made any sales impact. And
even when radio had a little adventure in its soul (or even had a little soul!), stations only played the most heavily promoted music. That great "little" band often flew under the radar.

These days a lot of music flies under the radar. So, how do we excavate the treasure out of what we perceive as dross? It's overwhelming. The issue here is gatekeeping. It's the only way to deal with the sheer amount of information that's out there.

One musical gatekeeper I've had luck with is Pandora. I like what's behind Pandora founder Tim Westergren's baby, the Music Genome Project -- an algorithm that compares the music you like with other music on thousands of different points. (If only the dating software worked so well.)

There are close to a million tracks thus encoded by over 90,000 artists (and counting). Through my various "stations" on Pandora (Fela, Steely Dan, CCR to name a few -- yeah, I know, nothing new), I've been turned on to artists and bands like Umphrey's McGee, Phoenix, and Ron Sexsmith -- not to mention reinformed of the links between seemingly disparate groups like Traffic and Television.

"The real intention was to build basic recommendation technology," Pandora founder Tim Westergren told me during a recent interview. "We wanted it to be a music discovery system."

One of the things I (and apparently millions of other people) like about Pandora is that it is simple to use. Put in the name of song or a group that you like, and it sends back song after song with the same or similar "Genome."

"Everything you hear on Pandora has gone through a very deliberate, methodical musical analysis," Westergren explains. "We have over 90,000 artists, and over 70 percent of them are independent."

Nor does the status of the musicians matter. Once it gets into the Genome (and there is some gatekeeping involved there) the artists that sell 13.5 albums and the artists that sell 1.3 million albums have an equal chance of pouring through your speakers if they match the Genome.

"I think one of the most important characteristics of the Genome is that it makes selections blind to popularity," Westergren explained. "It literally doesn't know when it picks a song whether the artist, or that song, have any commercial standing of any kind.

"It's a completely level playing field, and that's an important part of the equation here, because it's not just enough to be able to stream millions of different stations," he continued. "The real question is how do we bring in music that nobody has ever heard before, that doesn't have a purchase history or some kind of collaborative data that can help you decide where to put it. You need to understand the music itself. I think that's fundamentally the core characteristic of Pandora. We play stuff and know exactly where to put music that no one has ever heard before, or that few people have. That's why there's a lot of discovery, and why I think the potential of the service is enormous."