Pandora Radio

Overview

Pandora.com is a free internet radio site designed in 2000.  Pandora subscribers can utilize Pandora’s free service or they can become members by paying $36 a year.  Pandora free service subscribers hear advertisements between every three to five songs and advertisements on the right side of the webpage. The forty hour month listening limit for free subscribers was lifted in September 2011.  Paid members are exempt from visual advertisements on the page and by music interruptions by advertisements.  All users can create their own personal radio stations by entering in artists or song titles of interest.  Pandora’s extensive musical database recommends songs based on subscribers musical selections and their like and dislike ratings.  User can create several different personalized radio stations that can be shared with friends on Pandora or Facebook.  Pandora is connected with Facebook allowing users to post songs to users Facebook wall, follow Facebook friends on Pandora, share and create radio stations for friends on Facebook and song likes and dislikes can be viewed by Facebook followers.

 

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In 2011 Pandora spent 26.3% of its revenue on marketing and sales expenditures.  Pandora advertises its product via mobile devises, internet websites such as google and some broadcast outlets.  Pandora attracts 6.5 million unique visits to its web site and an additional 3 million unique visits by mobile devises.  Pandora generated 20 million in revenues last year and is expected to double in 2012 through its expansion on mobile devises and partnerships with Sony and Samsung to offer the Pandora app on their television and radio devices.  Pandora has experiences an increase in mobile device listeners from 4.6% in 2009 to 50.5% in 2011 surpassing its traditional computer listeners and Pandora’s mobile listeners is expected to continue to increase.  Pandora’s increased platform expansion increasingly entices advertisers to advertise on Pandora.  During a 15 to 30 second audio advertisement on Pandora the advertiser is the only ad presented on the page at that time and the advertiser is represented graphically with 2/3 of advertising real estate on Pandora’s web site.  Pandora tracks users interacting with the site at least six times per hour.  This interaction coincides with user’s ability to skip 6 songs per hour and users interacting through song ratings, skipping songs, building personalized radio stations, personal profiles, and song information and lyrics.  Thus, giving users the chance to interact and see ads during the three advertising segments each hour on Pandora’s traditional computer web site and on its mobile platforms, which include smart phones such as Android, blackberry, and Iphones, as well as other Apple products like the Ipad.  Pandora spends 58% of its revenues in royalty fees, however, as mobile devise, advertisement, membership and unique visits increase the variable costs will decrease.  Pandora has recently increased its presents globally and has attracted many from Puerto Rico, Canada and Guam.

Users

Pandora’s highest United States users are female between the ages of 18 to 24 and the second highest users are female between the ages of 25 to 34.  The typical Pandora user has no children; they have college degrees with average income of $0 to $50,000.  The ethnicity of a typical user is high in the other category followed by Asian and Caucasian users. In contrast to the United States, male users are high in Puerto Rico and Canada where Guam is much like the United States such that the female user rate is high. Advertising to men on Pandora in Puerto Rico and Canada could be a successful strategy based on this analysis.

Garnter’s Hype Cycle

Pandora’s app expansion through mobile devices, in car radios and television Pandora is in the new Gartner Hype Cycle category of Gamification, which lies at the Peak of Inflated Expectations.  Before Pandora created an app and moved to mobile devices it was on the Trough of Disillusionment because hype and coolness had worn off and new and improved technologies had become stale causing early adopters and other users to search for other cool new technologies.

Conclusion

Pandora’s biggest competitors are Clear Channel, satellite radio such as Sirius XM, and internet radio such as Last.fm and Slacker Personal Radio.  However Pandora offers its users the unique ability to personalize their stations and the webpage skin, therefore, giving there users the ability to personalize their music, share music and personalize their profiles.  Pandora is not just an internet radio like its competitors. Instead its extended data base helps users find song generous that curtail to their tastes.  The biggest critic complaint for Pandora is that its data base doesn’t include niche music like indie music, less main stream music.  However with the implication of apps and mobile access Pandora has increased its presents.  The coolness factor has increased with the interaction of Facebook and the unlimited listening ability to free subscribers.  Pandora’s understands the needs of its customers and the demands to increase technologically to keep and grow its audience and to increase advertiser success.  Pandora’s business strategy is heading in the right direction and I’m curious to see how Pandora will expand in the future.

Sources:
http://www.readwriteweb.com/enterprise/2011/08/gartner-adds-big-data-gamifica.php
http://softwarestrategiesblog.com/2011/07/27/gartner-releases-their-hype-cycle-for-cloud-computing-2011/
http://www.clickz.com/clickz/column/2042231/gamification-hype-cycle
http://jimworth.blogspot.com/2011_01_01_archive.html
http://allthingsd.com/20110526/pandora-pre-ipo-numbers-getting-bigger-and-bigger/
http://vator.tv/news/2009-05-26-pandora-sees-revenue-up-80-this-quarter
http://jimworth.blogspot.com/2011_01_01_archive.html
http://paidcontent.org/article/419-pandoras-kennedy-we-will-gradually-increase-audio-ad-inventory/
http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp
http://www.quantcast.com/pandora.com/demographics?country=US
http://trends.google.com/websites?q=www.pandora.com&geo=US&date=all&sort=0
http://www.semrush.com/search.php?q=www.pandora.com&db=us
http://siteanalytics.compete.com/pandora.com/

This is a student project by Lisa Bird

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