So, now what? What should Pandora do to rectify the situation?
- Ask your supporters in the House to draft a compromise bill.
- Apologize for the blog post I referenced in the above-mentioned October article where Tim Westergren calls out how much Pandora pays in royalties to SoundExchange and specific artists. That's where the trouble started. Obviously, Pandora pushed its luck and upset roughly 125 major players.
- Offer listeners one-year subscriptions to Pandora for half price. Come up with some sort of lifetime option. Pandora One, the platform's subscription option, is consistently one of the top in-app purchases in Apple's (AAPL) App Store. Drive that thing like you stole it.
- Increase revenue. Don't run more ads. That's always been a bad idea. Find a way to be an e-commerce player. And, as I suggested months ago, side with artists; become an independent concert promoter staging and selling tickets to exclusive Pandora listener-only concerts across the country.
Tim Westergren is a musician. I did not call him before I wrote this article, though I thought about it. I am sure he is sick about what has happened over the last several weeks.
He's likely more sick about being viewed as "anti-artist" (he's not, by the way, not even close) than he is about his business suffering potentially irreparable damage.
On the bright side, it's likely that Pandora will get through this internally because of Westergren and the culture he has created. I don't expect a Zynga (ZNGA)-like exodus because of the respect people have for Westergren and the rest of his competent management team.That's not a great bright side. But that's what happens when you make grave strategic errors. Things get ugly. Pandora must act and act fast, making genuine moves to take control of the situation. Follow @rocco_thestreet