Pandora: Rewarding the Musically Curious

Since 2005, Pandora has been satisfying vistors' musical cravings by playing "only music you'll love."  To get started, users just type in the name of an artist, song, or style of music, and Pandora will scan its massive database of analyzed music to find similar songs that appeal to your tastes.  Users can create up to 100 custom stations, allowing them to access just about every song in existence.  Pandora's database was formed through the Music Genome Project, which started in 2000.  The project is comprised of a team of music analysts who listen to song after song, taking note of every musical detail (no pun intended).  These notes allow Pandora to effectively search for music that matches the information that users input.  Pandora's ultimate goal is to connect users with music that they'll love, from the old to the new and from the mainstream to the obscure, while satisfying their curiosity for new music.

According to Anderson's Taxonomy, it seems that Pandora utilizes the freemium and advertising strategies.  With a freemium strategy, a company offers online software or services with varying tiers of access to content, from free to professional, paid versions.  Typically only 1% of users pay for the upgraded version, but the cost to serve the other 99% of users is negligible.  Also, since the free version offered by the company is the most widely used, in order for this strategy to work, there needs to be compelling benefits to upgrade to the paid version.  With an advertising model, companies offer free content sponsored by advertisers.  Customers never pay for any products or services, but must view ads alongside content or before receiving access to it.

I think that Pandora does effectively utilize both the freemium and advertising strategies in its business model.  Offering its services for free to customers makes sense because although some people would be willing to pay for the service, Pandora is able to gain a much larger customer base by offering it at no charge.  The advertising strategy also works very well for Pandora because it benefits the company as well as the advertisers.  Because Pandora contains so much advertising, it is able to offer its services for free to consumers.  Advertisers are attracted to Pandora because they can tap into already captive audiences and target them based on musical taste.  Also, users cannot skip ads, so exposure to the messages it pretty much guaranteed.

However, the ads do become very annoying for users.  While users understand that being exposed to ads are a normal part of consuming media, they don't enjoy having to sit through commercials while they're trying to listen to music.  Normally there is a commercial every few songs, which isn't so bad, but ads also often come up when a user skips to the next song.  Personally, this gets very frustrating.  I just want to find a song that I like and I don't like getting stuck listening to a commercial.  Although the advertisements can get very annoying, this actually ends up being a benefit to Pandora.  Consumers' dislike of the commercials is the #1 compelling benefit to upgrade to the paid version, Pandora One.  The main selling point of Pandora One is the fact that there's no commercials.  This version also offers a Pandora desktop application, fewer interruptions, higher quality audio, and custom skins.  It costs $3.99 a month or $36 for a year, but that actually ends up being much cheaper than buying a bunch of music on iTunes.  Any way you look at it, Pandora really has a lot of things going for it.

Pandora's strategies are also obviously working because according to blogger Patrick McMullen at Fizziology, Pandora was the #1 music service mentioned in social media in January 2013.  Patrick also says that comparison to other online music services, Pandora users represent the widest array of listeners with different musical tastes.  (See more from Patrick here)

In my opinion, Pandora is the most successful online music service.  I use it all the time and am really happy with it.  I can choose a station that fits my mood at the time and can even shuffle between all of my stations.  If I don't like a song I can give it a thumbs down and skip it rather than having to sit there and endure it.  And Pandora will remember that preference for later so that they can continue to tailor music selections to my taste.  It's pretty great.  I know that there's a lot of other music services out there that are probably also great, but I don't think that I'm going to switch anytime soon because I don't see anything wrong with Pandora.  I'm definitely a fan.