Put yourself in Roger Lynch’s shoes and ask yourself why you would have left Sling TV, an OTT video service which may not be doing that well, but which is young enough to change, and instead joined Pandora, a dyed in the wool music streaming service who’s refusal to change its spots, led to Spotify overtaking it and leaving it in its dust.
The answer will, of course, be money. Typically if you have an out of the box, free-thinker, who can get to the bottom of fresh internet based business model concepts, and inject enthusiasm into them among his team, you tempt him with iron-clad performance promises. No matter that Sling TV is salvageable and that Pandora may not be.
We remember one such move with Sanjay Jha, heir apparent at Qualcomm, instead taking the challenge at Motorola in 2008. Basic pay was nothing to do with it, he was on a massive performance related package and his four year stewardship of Motorola, involved cutting ties with Freescale, countless reorganizations, the sale of the mobile operation, the embrace of Android and finally the sale of the remaining business to Google.
In return he got around $8 million a year, a $13.20 million bonus for the sale, and $52.5 million in stock options, plus $10.8 million in severance pay at the end of four years – a cool $100 million in all. Chances like that don’t come along very often and the key thing is culture change. You cannot promote someone who is already on the team to engage in culture change – because they are usually still arguing about changes made 5 years earlier and holding grudges about opportunities already missed. Hence Pandora going all out for Roger Lynch this week.
Yes he was well placed at Dish, with Sling TV potentially going to one day become the revenue main stay of the entire business. But there he was just the hired hand and the existing CEO and COO were no doubt influencing progress (read impeding change). This is a bad thing for Sling TV, which had largely stalled in sales, until recent content signings including pay per view sports – even so it is trickling along at about 150,000 quarterly net adds or 50,000 new customers a month.
So all cannot be plain sailing at Sling, and increasingly the senior management of the firm is taking a hand – always a bad move, because existing senior managers will always look to preserve what they have, and sacrifice the company’s future – pretty much what held back Hulu for years. COO Erik Carlson will now take over Sling TV directly. Oh dear, oh well it may only be a temporary measure – but we will keep an eye on those numbers if we can.
Carlson is a of course someone who has been steeped in the Dish culture for the past 20 years, and how much attention do you give a start-up like Sling TV, when you have almost 13 million other subscribers to worry about?
The parting was equitable, but it applies even more pressure on the Sling T V operation, something which investors are finally having second thoughts about given the recent falls in the Dish stock price, although that may be entirely due to the spectrum that dish holds and its falling perceived value.
Interestingly it is Naveen Chopra that Lynch will join at Pandora, a man who was gifted the CEOship at TiVo, after Tom Rogers stepped down, which prompted us to say his job was to find a buyer, and find a buyer he did. Let’s hope that Chopra being the CFO is not an indication that the only way out for Pandora is to sell it on. If it was, then surely Chopra, who has served as Pandora’s interim CEO since June, would have stayed CEO. No, the future of Pandora is about rethinking and marketing, and these are considered Lynch’s stronger suits.
Pandora’s chairman, Roger Faxon, said “We are very excited to welcome Roger as our CEO as we embark on our next chapter with renewed focus, a strong balance sheet, a strategic partnership with SiriusXM, and an incredible team of loyal and creative employees.”
Lynch was once the chairman Video Networks in the UK, a Netflix rival, and before that ran Chello Broadband in Amsterdam.
Pandora has also drafted in Michael Lynton, currently chairman of Snap, as a board member. It would perhaps have done better to sell the business off to Snap, the parent of SnapChat, and look for synergies. Snap has a market capitalization in the $16 billion region, compared to its own lowly market cap of $2 billion, which enjoys only about half the value it had a year ago.
It’s tough to see Pandora making any kind of comeback in the shadow of a strong global rival like Sportify, in a market which now has Apple Music as its natural successor.
As if to give the new boss at Sling something to cheer, it launched an in-browser player for Google Chrome, so that Android and Chrome customers can look at Sling TV on any device without downloading an App.