Pandora Radio
Pandora Radio:
Fire Unprofitable Customers?
By Chih-Hsin Chen and Pinar S. Ozer
11.10.11
Management Information Systems -INFO 503
Prof. Ross Malaga
Fall 2011
Online Radio History Before 2000
The beginning of online radio could trace back to the
1990s.
Arround year 1996, Nullsoft and Microsoft released streaming audio players as free downloads.
Internet radio attracted significant media and investor attention in the late 1990s and the early
2000s.
Pandora Radio
Started back in the year 2000.
Main feature: Music Genome Project®
A system that learn from feedbacks and become more precise in making music suggestions.
Screenshot
Business History
After “Music Genome Project” established, they tried selling to both online & offline music stores first.
In 2004, Pandora.com was created.
Test of subscription model.
Business History (continued)
Switched over to a free model but still offered a subscription during 2005.
In 2007, the Copyright Royalty Board announced a new fee schedule for internet radio.
2008, Congress passed the Webcaster Settlement Act
Business History (concluded)
In 2008, Apple released the second-generation iPhone and allowed a 3rd party to distribute apps though Apple App Store.
In 2009, Pandora reached an agreement with
SoundExchange.
SWOT Analysis
Strength:
1. User basis.
2. Music Genome Project.
Weakness:
Lack of ability to create sufficient revenue.
SWOT Analysis(concluded)
Opportunity:
1. High customer recognition.
2. Number of user basis.
Threat:
The competition is getting worse in the industry.
Problem Statement
Should Pandora “Fire” their unprofitable customers?
Obviously, this is not the REAL problem here.
The REAL problem is, how do Pandora maximize their revenue with current or alternative business model?
Analysis of Pandora Radio
THE BUSINESS MODEL of PANDORA
The Business Model of Pandora
In Pandora’s Business
Fire Unprofitable Customers?
By Chih-Hsin Chen and Pinar S. Ozer
11.10.11
Management Information Systems -INFO 503
Prof. Ross Malaga
Fall 2011
Online Radio History Before 2000
The beginning of online radio could trace back to the
1990s.
Arround year 1996, Nullsoft and Microsoft released streaming audio players as free downloads.
Internet radio attracted significant media and investor attention in the late 1990s and the early
2000s.
Pandora Radio
Started back in the year 2000.
Main feature: Music Genome Project®
A system that learn from feedbacks and become more precise in making music suggestions.
Screenshot
Business History
After “Music Genome Project” established, they tried selling to both online & offline music stores first.
In 2004, Pandora.com was created.
Test of subscription model.
Business History (continued)
Switched over to a free model but still offered a subscription during 2005.
In 2007, the Copyright Royalty Board announced a new fee schedule for internet radio.
2008, Congress passed the Webcaster Settlement Act
Business History (concluded)
In 2008, Apple released the second-generation iPhone and allowed a 3rd party to distribute apps though Apple App Store.
In 2009, Pandora reached an agreement with
SoundExchange.
SWOT Analysis
Strength:
1. User basis.
2. Music Genome Project.
Weakness:
Lack of ability to create sufficient revenue.
SWOT Analysis(concluded)
Opportunity:
1. High customer recognition.
2. Number of user basis.
Threat:
The competition is getting worse in the industry.
Problem Statement
Should Pandora “Fire” their unprofitable customers?
Obviously, this is not the REAL problem here.
The REAL problem is, how do Pandora maximize their revenue with current or alternative business model?
Analysis of Pandora Radio
THE BUSINESS MODEL of PANDORA
The Business Model of Pandora
In Pandora’s Business