Pando's radio app has a radical business model: User donations

By Erin Griffith , written on August 20, 2013

From The News Desk founder Thomas McAlevey does not mince words. Last time I covered his radio app, he called the offerings of his competitors, Spotify and Pandora, "just boring as hell." And as for traditional radio? His offering "completely demolishes" traditional radio's "last bastion of security."

He talks a big game. After a year in private alpha, was set to launch out of "private alpha" last September, but did not. Since then the company realized that users wanted a mobile offering, so in January, the company completely rebuilt its tech to be mobile-first.

The result, launched today, is a pretty slick app. It may not demolish traditional radio's last bastion of security but is at least a unique listening experience in a sea of "FNAC" music startups. "For all my talk and cockiness, I'm pretty good at backing it up, but the best marketer of the product is the app itself," McAlevey says.

The differentiator between and Pandora is the way stations are created. Where Pandora users can create stations around an artist, genre, or song using the company's Music Genome Project and an algorithm, stations are created around human-curated genres. You can choose a genre (say, alternative rock) and add in others, tweaking the percentage each genre is represented with a slide bar. Users can also create their own playlists, which must be 30 tracks or longer. Once they're added to the library as a "station" they can be played on-demand (without having to strike on-demand deals with the labels). The company would like to strike direct licensing deals similar to Spotify's but can't afford it at the current terms, McAlevey says.

I'd say is better to look at and more browse-able than Spotify's iOS app but that is not a terribly high bar. However, the genres weren't specific enough for me. A station I created that was a blend of "Alternative Rock" and "Punk Rock" included songs from Nickelback and Matchbox 20, which, I get it, but not quite what I had in mind. I wish I could have narrowed it down more to cut out 90's alt rock and anything that's on the radio.

In general, the genres are fairly mainstream, which probably satisfies the majority of listeners. Later, a pop station introduced me to a few new songs, which I saved and will be back to listen to again. The benefit over Pandora's algorithm, McAlvey says, is that the station never wanders into strange territory by connecting songs that are only tangentially related.

The original vision of was to allow users to create their own radio stations and be their own DJs, called "radcasting." That was the part designed to destroy traditional radio's "last bastion of security," i.e., the personalized feel of talk radio. decided to nix radcasting for the moment because users were too overwhelmed by all the features while testing it out. "We were giving Photoshop to people who are used to MS Paint," McAlvey says. Radcasting features will eventually be slowly introduced.

Perhaps the most innovative thing about is its monetization scheme. The app, which has raised only a small amount of venture capital from angel investors, will support itself with user donations. The app uses ten-second plugs which ask for a donation every five or so songs and can be turned off after someone makes a donation. "It's a long term plan that could fail if nobody donates," McAlevey concedes. "We truly believe in the goodwill of human beings."

"I hate ads, I hate the experience of listening to them, I hate sales teams," he says. "So this is all wonderful if I can make it work. I firmly believe this will generate more money than ad sales and will be a better user experience."

[Image via Wikimedia commons]