Pandora Case Study
Pandora Case Analysis
Abstract Pandora provides personalized Internet radio stations to its customers. Pandora provides this customized radio free of charge to its users. In combination with other business models, Pandora has successfully implemented the freemium business model in which 99% of its users receive a free service and 1% of the users pay for premium services. This business model is not appropriate for every type of business but can be profitable for some types of businesses with a planned implementation process and a clear understanding of customer values. Analyzing the success of Pandora provides information on the necessary requirements in order for business to earn a profit using the freemium business model.
Pandora Case Analysis Pandora offers an Internet radio service, which tailors the music played, based on user preference. Pandora began as a free service to its consumers, while they found a way to earn a profit. Pandora utilized several different business models before implementing the freemium model. The freemium business model provides free services to 99% of the customers and expects 1% of the customers to pay a fee for premium services (Laudon & Traver, 2011). This business model can be very effective and profitable for certain types of business when managed correctly. Analyzing Pandora’s successful use of the model provides insight on which conditions need to be present in order for the freemium business model to be effective and profitable. The freemium business model is appropriate to use when the product or service is widely available and there are low variable costs in providing the product or service to each customer. It is also important that the business takes into consideration the timing of implementation and understands their customer’s values.
History of Pandora The foundation of Pandora began with the creation of the Music Genome Project in 2000 and the service officially launched in 2005
Abstract Pandora provides personalized Internet radio stations to its customers. Pandora provides this customized radio free of charge to its users. In combination with other business models, Pandora has successfully implemented the freemium business model in which 99% of its users receive a free service and 1% of the users pay for premium services. This business model is not appropriate for every type of business but can be profitable for some types of businesses with a planned implementation process and a clear understanding of customer values. Analyzing the success of Pandora provides information on the necessary requirements in order for business to earn a profit using the freemium business model.
Pandora Case Analysis Pandora offers an Internet radio service, which tailors the music played, based on user preference. Pandora began as a free service to its consumers, while they found a way to earn a profit. Pandora utilized several different business models before implementing the freemium model. The freemium business model provides free services to 99% of the customers and expects 1% of the customers to pay a fee for premium services (Laudon & Traver, 2011). This business model can be very effective and profitable for certain types of business when managed correctly. Analyzing Pandora’s successful use of the model provides insight on which conditions need to be present in order for the freemium business model to be effective and profitable. The freemium business model is appropriate to use when the product or service is widely available and there are low variable costs in providing the product or service to each customer. It is also important that the business takes into consideration the timing of implementation and understands their customer’s values.
History of Pandora The foundation of Pandora began with the creation of the Music Genome Project in 2000 and the service officially launched in 2005
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