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For our Group project we will be doing a marketing profile analysis on Pandora Internet Radio. First, we will explain what the company does. Next, an in depth analysis including the site navigation, the Pandora business model, brand interactivity, the brand look, brand personality, their competitors, Pandora’s metrics, what kind of consumers use Pandora, how consumers behave, and where Pandora could use room for improvement will follow.
In the business model we will look at how Pandora makes their revenue through the different services they offer. Site navigation will describe where each click will take you and how to get from page to page. Brand interactivity explains how not only user can interact with Pandora, but how Pandora can interact with it’s users. Further, we will see how the brand looks across different formats from computer screens to mobile phones in brand look. Next, in brand personality, we will discuss what kind personalities are embedded in the brand. Also, while looking at competitors we will see how Pandora fares against their top competitors and what they do differently. Pandora’s metrics will include the sites traffic, how long a consumer stays connected to a site, and its reach. Finally, when we look at consumers, we will look at how the Net gen is the majority of Pandora users, and how consumers move through the behavior model of acquisition, consumption, and disposition.
What is Pandora?
Pandora is a Internet radio service created by the Music Genome Project. They started up in 2000 and according to their website “it’s the most comprehensive analysis of music ever undertaken.” Users can enter a song or artist and Pandora will play music that you entered, but also music that is stylistically and auditorily similar.
They have more than 50 music analyist that study and listen to the music one song at a time, collecting details on every song based on close to 400 attributes that include melody, harmony, instrumentation, rhythm, vocals, and lyrics. According to their website, the
“typical analyst working on the Music Genome Project has a four-year degree in music
theory, composition or performance, has passed through a selective screening process, and has completed intensive training in the Music Genome’s rigorous and precise methodology.”
Pandora never uses any bots or machines to extract data from any of the songs. The songs are always being updated and new songs are continually added to their ever expanding catalogue of titles.
Pandora’s website is very easy to access. The address is http://www.pandora.com/. When the page loads, there are 3 places you can click at the top half of the page. You can register a new account, log-in with a preexisting account, or type in an artist, or song, and immediately begin listening to music. Clicking on the “register” hyperlink takes you to the registration page and is completely free. The only information needed is an email address, a password, the persons birth year, their US zip code, and their gender. There is a opt-out check box for personalized recommendations and tips. Once everything is complete you can click “register for free” of “cancel.” Registering for a Pandora account allows you to save you stations and access them from anywhere. If “sign -in” is chosen, all that is need is an email address and password. This takes you to all of your saved stations and also allows you to type in a new station or artist. Typing in an artist or song starts playing the music.
The bottom half of the page is newer. There is a space where you can click to see the information about the music you are playing, view a mini feed of your profile, select music by genre, learn about how to get Pandora radio on your mobile phone and in your home, and see what’s happening in the Pandora video series. Below this feed, you can view concert listings, gift a station where you can make a station and give it to another Pandora user, look at bookmarked songs, and again, go to the video series page.
The business model for Pandora is mostly ad driven. Consumers can register for free and begin listening to music immediately. Users are never required to pay anything because it is payed for by the advertisements. However, they have two more aspects to the business model.
Once free Pandora accounts reach the 40 hour mark of listening per month, the music stops and you are required to pay 99 cents for unlimited listening for the rest of the month. You can also just come back the next month for another 40 free hours. Each month has the same choice on the limit and they never bill you after the fact of charge you.
The final part of the business model is a paid Pandora One subscription account. This offers unlimited listening hours each month, plus no advertisements. It comes with a high stream quality, desktop application, extended interaction timeout, and a mini player. This can be purchased for a subscription for 36 dollars per year. Pandora also has a box through HP that you can purchase to stream music anywhere in your home. It has built in speakers and Wi-Fi connectivity.
Aside from music, you can now view the Pandora vise series and look up concerts coming to areas near your town. Pandora is branching out to video and live music avenues. They also work with mobile companies through advertising and putting mobile applications on phones so you can listen to Pandora anywhere instead of just a computer or home device.
Pandora allows for users to expand their musical knowledge based on their own personal preferences without requiring the user to purchase songs on a whim. The seemingly archaic days of buy before you try have ended partly because of services like Pandora. Pandora gives users the option to purchase each song multiple ways in a variety of digital formats. One of these methods is to buy a song via iTunes. While the iTunes service itself allows for the sampling of a given song, it does not give users the ability to stream the entire song prior to purchase.
Pandora is becoming more that just an internet radio player. Consumers can create a profile much like social networking sites and add friends to communicate with. Users can leave comments on other users’ profiles, share radio stations, and even find other Pandora listeners.
With Pandora mobile applications, users can access this information where ever they are and listen to music straight from their mobile phones. Not only can you search to find song, or artist, you can also take a look at the Pandora video series, which is a video blog that contains videos about music, how the music is made, and where to hear it. Pandora also has a written blog where users can interact and comment on posts.
The final point of interactivity is users can see a schedule of local live shows in their area. The list is based on your bookmarks list, thumb up and you station seeds, so the concerts that they show you are going to be based off of what your profile says you listen to and what you like. For each event, you can click on the “ticket info” button which takes you to the event website, to view the event and get tickets. This can also all be accessed from the mobile phone application.
Brand look across formats
Pandora’s brand look is, for the most part, uniform across its various mediums. The page is identical no matter what browser you chose to view it on. This is extremely important for a service like Pandora. This is because a user might choose to view this content on a computer loaded with a browser that is different from the browser that they usually use Pandora on. An example of this would be a user who usually uses their windows-based computer loaded with Internet Explorer to access Pandora being forced for some reason to use a mac-based computer loaded with Safari. Because of Pandora’s uniformity across platforms, this user will be able to use their Pandora on the mac-based computer without the initial learning curve often associated with using new web based services.
Pandora is also able to be accessed on various broadband enabled mobile devices. Pandora has taken steps to make their service as uniform and consistent as possible across the mobile devices that might be used to access Pandora. For instance, Pandora accessed on a user’s Apple iPhone 3G looks almost identical to Pandora accessed on another user’s Motorola MOTORAZR V3. Furthermore, the page layout on both devices mirrors that of Pandora accessed on the users’ personal computers. This is another step Pandora has taken in order to reduce any additional learning curve that might be associated with accessing Pandora service on a user’s mobile device.
Pandora’s brand personality includes both a mechanical passion for music as well as a passion for connecting users with music that they otherwise might not have had or wanted access to. This mechanical passion for music is made evident by Pandora’s Music Genome Project. Because of this mechanical passion, Pandora’s brand gives off a scientific vibe.
Pandora is also very diverse because no one person’s musical taste is exactly like the next person. Musical taste is something that is very unique and Pandora is trying to cater to each person’s uniqueness. They know each person is different, which what makes them different from other internet radio stations.
Pandora is kind of like the guy that no one really cared about, but then everyone wants to know him because they realized how cool he really is.
While Pandora brings many new and unique features to free internet radio, it is hardly the only game in town. Last.fm, Imeem, and Grooveshark are just a few internet radio alternatives to Pandora. Each of these services offers their own take on Internet radio.
Lately, Last.fm has taken the position of Pandora’s primary competitor. Like Pandora, Last.fm offers users the ability to stream custom playlists based on a user’s personal preference. While both services share this feature, they have unique and independent ways of doing so.
Last.fm employs a technique called Scrobbling to determine which songs rise or fall in popularity. This is accomplished by the user downloading software on their personal computers and ranking their streaming music. With millions of users doing this on a daily basis, this is a great way to crowdsource popularity.
Pandora on the other hand is based on The Music Genome Project. This is essentially a database of artist-defined analysis of each song. This analysis is primarily based on the song’s musical attributes as well as unique qualities associated with the each song.
So one on hand, you have millions of laymen ratings helping to improve the listener’s streaming experience, and on the other hand you have a selected group of well trained ears pouring over individual songs to produce unique playlists for the user. Which is better is left up to the individual user.
Recently, one of Pandora’s competitors, Imeem, has stolen a substantial amount of traffic away from Pandora. Imeem is part social networking site, part internet media service. With Imeem, users interact with each other by streaming, uploading, and sharing music and videos. Imeem also allows users to build and share custom playlists with others directly on Imeem’s website or via an imbedded Imeem player through external sites such as Facebook and Myspace.
Other online music services such as Grooveshark compete with Pandora. Grooveshark allows users to upload, stream, and vote on content similar to Imeem. Grooveshark also incorporates a Pandora-like system for recommending content based on the users personal song choices. With all these great features, why is Grooveshark’s traffic almost stagnant next to Pandora’s mammoth annual growth of close to three million users? Grooveshark users have provided criticism that Grooveshark does not indemnify its users against any unlicensed uploaded content. Essentially, this means that Grooveshark is not responsible for the content that they host.
Pandora Site Metrics
According to Alexa.com, a website that specializes in web traffic metrics, Pandora is ranked 82nd for United States website traffic. This sandwiches Pandora between Newegg.com, arguably the internet’s largest electronic retailer, and the United States Postal Service for internet traffic.
There are many metrics with which to compare a website’s e-traffic and ultimately said website’s/services success. The first of these metrics and arguably the most important is a website’s daily traffic rank trend. This metric compares Pandora’s daily traffic against other websites accessed. According to this metric, daily Pandora traffic has fluctuated over the past year. Currently, Pandora is ranked 371.
Another metric with which to compare Pandora to its competitors is the time the average user stays connected to the given website. Currently, the average Pandora user stays connected eleven minutes. In relation to Pandora’s previously discussed competitors, Pandora has the longest user retention rate. This compares to Last.fm and Imeem’s five minute and Grooveshark’s seven minute user retention rate.
The last metric used is Reach. Reach refers to the percentage of global internet users who visit Pandora. According to Alexa, 97.7% of Pandora’s users access Pandora from within the United States. This metric shows that Pandora has a strong national user base but should look into expanding their international user base. This is not necessarily the case for Pandora’s competitors. Imeem, for example, has an extremely strong user base in Thailand, having a national user base of only 42.8% United States users. Last.fm has a United States user base of 35.2% with the remaining 65% consisting of international users. Ultimately, Pandora will need to begin increasing their international traffic if they plan on sustaining their growth.
The types of people we see using Pandora, more frequently, and more often are the Net Generation. They were typically born from 1980-2000 and are anywhere from 10-30 years old. The reason that the Netgeners use Pandora more is because Pandora is a digital product and the Netgeners are growing up in a digital world. “They are different from other generation in that their lives are surrounded by digital media.” (Tapscott)
73% of youths between the ages of 12 and 17 use the Internet. For most teenagers it is a way of life. So, it is only natural that we see this age demographic using Pandora services.
The characteristics of these consumers are as follows according to Tapscott. They have fierce independence because they create online identities and acquire knowledge to make their own decisions. They have and Intellectual and emotional openness and view the world in a global context. They have very free expression and have strong views. They are also very innovative and have a strong desire to be more mature than their predecessors. They investigate things out of curiosity, demands real time and fast processing, are very sensitive to corporate interest, and are very trusting online.
How the consumer gets content from Pandora is that they find it. This is accomplished by typing in an artist name, or song name, and Pandora streams then the content. They also get to choose more or less what they listen too. Also creating a profile helps in the acquisition process. They also get to create stations so that they can the content that suits them best.
The customer consumes content by listening to the music, reading the blogs, or watching Pandora’s video series. They can also consume content by getting gift stations from other users and communicating with them through a simple messaging service.
In the disposition process, consumers can bookmark and save songs to remember them later and even use the information so that they can personally own the song. The content never really goes away though. They can listen, watch, or read the duration of the content, but it’s always there for the consumer to go back and listen, watch, or read it again.
Ideas for Growth
The first idea for growth, which I think will also target a larger market, is somehow incorporating their service into automobiles a little better. Currently, Pandora can only be heard through computers and cell phone with broadband data plans. If Pandora can create a way for people to get internet radio in cars with services, they could reach a larger audience for people that either don’t listen to music on their computers or don’t have expensive smart phones. A way of implementing Pandora into an already well respected device would be to implement Pandora functionality into satellite radios. It would also be a safer alternative to have something compatible with a car that being distracted by a mobile device.
Next, Pandora needs to begin expanding into the international market. Currently, Pandora has blocked access to users outside of the United States. This clearly explains why Pandora’s user base is comprised of 97.7% United States’ users. Pandora founder Tim Westergren spoke directly on the topic saying:
“As it stands now, there is still no affordable license for a webcaster to stream legally (ie. abiding by all standing copyright law and properly compensating performers and composers) anywhere outside the US.”
However, Pandora has publicly stated their commitment to finding a way to provide Pandora service to international users, leaving new potential users with only “keep the faithâ€¦”
Finally, Pandora should look to advertise their paid services more. Even if they don’t in publications or Ads, they need to at least start pushing it on their website more. The guess would be that they don’t want to seem like they are moving to a paid service, but if they want to stay in this business, more money is what it is going to take and they need to start pushing people to subscribe, or buy products from them.
Channel Mix Plan
The Channel mix plan for Pandora is Internet. It is the one channel that can reach the maximum number of clients for their business model. They also use a phone application as a channel through mobile Internet service providers. The messaging with customer through both channels is all opt-in only. You will only receive emails if you check a box and any information is only sent or retrievable of you want, or ask for it.
In conclusion, we have discussed Pandora’s business model in detail. It seems that once Pandora can monetize their service appropriately, they will be an extremely, financially, successful digital media venture. Furthermore, Pandora has a great deal of legitimate future growth considering they have yet to expand their service outside of the United States. Ultimately, Pandora has an extremely bright future in the internet radio market.
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