 Hey guys, it's Casey with The Verge. We're here at CES in our studio, and in studio with us this morning is Tom Conrad, the CTO of Pandora. We're going to talk about a bunch of music stuff. Tom, thanks so much for coming by the studio. It's great to be here. So you told me earlier that this is your tenth CES. It is. And do they give you like a watch out of a catalog at that point or anything? Yeah, you get a pebble actually. That's nice, it's a smart watch. It's a smart watch. That's wonderful. So you've been working on Pandora for just about ten years. So take me about, what was CES like for you ten years ago when you first showed up? Let's see, we stayed at the Excalibur. Wonderful. Which is very nice. I think three of us came, we had a single meeting with a brick and mortar retailer and talked about putting music listening kiosks into their CD department. So yeah, we've come a long way since ten years ago, CES. And I think Pandora has evolved in a lot of interesting ways since then. Obviously any tech company over ten years is going to change a lot. But can you give us a sense of just like how big the scope is of Pandora on consumer electronic devices? Yeah, I think Pandora is on more than a thousand different consumer electronics devices today. And it's funny, I was looking back at some photos that I took at that first CES ten years ago. I was like a kid in a candy store for the first time on the showroom floor. And it's amazing. The stuff that was on the showroom floor ten years ago was digital cameras, big flat screen TVs, cell phones that were increasingly looking like little computers. It's the same exact stuff that's on the show floor this year. But it feels like the world has changed a lot. So I've been kind of thinking, well, what's driving that sense of change other than the TVs are getting bigger and flatter or less flat? I guess this year they're all curved. And I think that one of the big transitions is that ten years ago, none of that stuff was connected to the internet. I mean, literally the only thing in my life that was connected to the internet ten years ago was my laptop, my personal computer. And today, like everything on the show floor is connected to the internet. Every TV, every speaker. We have a refrigerator that streams Pandora and a jacuzzi that streams Pandora. There's a smart vacuum now, too, so you might want to look into that. That's great. That's great. I'd like to be able to control my vacuum from the office with my smartphone. Who wouldn't we all? Who wouldn't? Yeah. And then, of course, the other thing that's really changed over the course of the ten years is the services that we use. I mean, ten years ago there was no Facebook, there was no Twitter, there was no Netflix streaming, there was no Pandora. And so you kind of sum that together. I think, at least for me, that's what's driving the sense of innovation and change at CES is the internet connectivity being kind of ubiquitous and these services that have come along in the context of that ecosystem. Right. And as the internet gets connected to more devices, that creates more opportunities for companies like Pandora to put their services on board. At the same time, it can create challenges because every implementation is a little bit different. But you guys have done a lot of stuff around HTML5. Can you talk a little bit about what you're doing to try to make all those implementations a little bit easier on yourselves? So for the first many, many years, going back six or seven years now in Pandora's history, we had a strategy that said, let a thousand flowers bloom. One of the strengths of radio generally is that it's ubiquitously available. Pandora's going to step into the opportunity of defining what the next generation of radio looks like. We have to enjoy that same level of ubiquity. And so to get there, we developed a SDK and a platform and a set of developer tools and services that would allow a partner to implement Pandora on a television or a connected speaker or a set-top box. And they'd build the Pandora client to our specifications. They'd send us an example. We'd run it through a set of certification tests and so forth and tell them, OK, go ahead and ship it. And there are a bunch of advantages to that approach. It's meant that we've been able to get Pandora into tons and tons and tons of devices with a relatively modest amount of work on our end. The downside is there are probably hundreds, literally hundreds of different Pandora implementations that are baked into firmware, sitting on devices that will never evolve, that will never change. Occasionally in the worst case, they end up looking more like a Korean karaoke machine than the Pandora that we know and love. Unfortunately, that's fairly rare, but it occasionally happens. And so about 18 months ago, we started to think about, what does the next generation of this look like? As it becomes more mainstream, it becomes increasingly important that we can evolve the experience for our consumers, for our advertisers, and get back in control of the user experience. And so we made a bet that web standards, things like HTML5 and WebKit and some of these things would make their way into the consumer electronics world, starting first with televisions and set-top boxes and then migrating to other things. And we were either prescient or lucky. I think we were just kind of lucky, frankly, but that's really, really happened. So we've got a great version of Pandora that's built entirely out of HTML5 and other web standards that we can target at any devices capable of rendering a web page. And so Chromecast is a great example of that. Chromecast, of course, adds the additional kind of wrinkle that your smartphone becomes a really interesting remote control for the content. Sony has Blu-ray players and televisions that have a great HTML5 engine that runs this native Pandora platform. We've demonstrated with Samsung. We're working with lots of other players as well, which accomplishes that goal of putting us back in control of user experience because every single time one of our listeners activates the Pandora application, what's really happening under the covers is the device goes out to the internet and says to Pandora's data center, what's Pandora today? And we can change the answer to that question every day if we want to experiment and so forth. And just to mess with people sometimes. And just to mess with people, right. One of the reasons that's interesting to me is that in the mobile world, HTML5-based apps never really took off. Like Facebook famously made this huge bet on HTML5 apps. And eventually Mark Zuckerberg said, this was a mistake. This didn't work for us. It went back to native apps. Why do you think that HTML5 has been successful for Pandora on all these devices where maybe native apps seem to be succeeding more in the mobile world? That's a good question. I think one dimension that's at play is that we're just really good at HTML5 development. No, I don't know. The experience really is indistinguishable from the native applications on the same platform. So there's no deficit to the user experience. And I think in some of the things that have been done in mobile, it's really obvious that you're not dealing with a native experience. And some of that maybe even comes from the fact that in the mobile environment, there's a whole kind of aesthetic to the user experience that's delivered through the native platform. In the context of the television, we don't really have that. There's not a set of native user interface elements and things that's consistent across applications. And so we don't find ourselves trying to mimic platform behavior through HTML. So there's a bit of that. I don't know. It's working now. Yeah. Let's talk about advertising a little bit. Advertising normally a boring topic for me personally, but I read a really interesting story in the Times over the last week about some of the things that you guys are doing around targeting ads of people based on their music preferences. And I think that most of us think of ourselves as unique little snowflakes. But from what I read in the Times, just by knowing a couple of the things I like, you can actually tell a lot about maybe my political preference, maybe about where I might like to travel. Can you tell me about some of these insights that you're getting about your listeners just from the music that they're listening to? Yeah. So it's been a really interesting year for us in that dimension. We've got an incredible team at Pandora whose job it is just to make the best playlists in the world. So these are data scientists and machine learning experts, algorithm guys, big data guys. It's a really best in the world kind of team with respect to the task of personalizing the Pandora listening experience. But it turns out that the skills that that group has are really easily applied against the data science problem of how do you deliver exactly the right ad to the right user at the right time, the right song to the right user at the right time, the right ad to the right user at the same time, which is really the goal. No one wants to put an ad in front of you for a product or service that's not interesting to you, just like we don't want to put a song in front of you that you don't like. And so Pandora knows a handful of things about you. When you register, you tell us the year you were born. You tell us the zip code that you live in. You tell us your gender. And then, of course, as you interact with the service, we become familiar with your musical preferences as well. And it does turn out that the combination of that data, a sense of what part of the country you live in and the kind of music that you listen to, we can use to extrapolate to lots of interesting things, political preference, household income, ethnicity, which allows us to do smarter, inferred targeting for advertising beyond what you might be able to do just from the obvious things that we collect, like gender and zip code and so forth. Do you ever try to log in as a 95-year-old woman just to see how the ads will change? All the time. All the time. Yeah. I mostly use Pandora as a 95-year-old woman. Awesome. So I would be really curious to know what you have coming up on the product side this year. It's a new year. I'm sure you've done a lot of strategic planning over the past couple of months about what you're going to be up to. That's right. And I'm here to tell you all about it. Let's just lay out the product roadmap. Let's just lay out the whole product roadmap. That's what Steve Jobs would do. Exactly. Well, I think one of the things that we're working on here at CES and is a really important sort of dimension of the evolution of Pandora is getting Pandora into the automotive environment. About half of all radio listening takes place in the car. If we're going to reinvent radio as a medium, we have to have a really strong presence in automobiles. And so we have, over the last few years, developed really close working relationships with all of the major automotive OEMs, I think more than 20. We're in 130 different automobiles today. And I don't mean like you can use the AUX cable to listen to Pandora Bluetooth streaming. These are custom Pandora implementations where your cell phone provides the data connectivity and actually runs the application, but it connects to the dash and all of the user interfaces facilitated by the car. So if you're in a car that features voice control, you'll use your voice to control Pandora. If you're in a car that has a touch screen, you use the touch screen. If it's a hardware-centric environment, you use the hardware buttons to control Pandora. And so we've done a lot of work to get Pandora into that kind of generation of the automotive internet. But we're just at the cusp of the second generation, which we call the connected car. And the connected car really is the fulfillment of the vision that we had in 2004 when we started designing and building Pandora, which is that everything in your life is going to be connected to the internet, including the automobile that you drive. And so we're talking about cars that are fundamentally and constantly connected to the internet, just like your television and your Blu-ray player and everything else in your life. And what that does is it really makes Pandora appear to FM radio. There's a FM antenna, there's a cellular antenna. And so the consumer gets in the car, turns the key, and Pandora starts streaming right where you left it when you got out of the car the last time. And so we're really excited about that. But what it means is that it's an entirely new runtime for the application. In the first generation scenario, we are able to take advantage of the fact that the application is actually running on your cell phone, Android or iPhone. In this connected car scenario, it'll be the car's platform. And so what's interesting is that environment is shaking out to be very web standard centric, HTML5 centric as well. And so we're able to leverage a lot of the investments we've made in that technology platform in the context of the car. But there's tons and tons of work going on at Pandora around just making sure that we have best in the world implementations of Pandora and this next generation of connected car scenarios. Right. Well, cool. So a few years from now, we'll have self-driving radio in our self-driving cars. Exactly. Wonderful. Tom, thank you so much for coming by the studio. Thanks. Super fun. Thanks for having me.