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The New Pandora

Comments  /  Megan Olson

Pandora’s new logo isn’t the only major change to the seventeen-year-old streaming music platform. In the past year, Pandora has evolved, with acquisitions and deals that have helped improve relationships with labels. They’ve introduced new services and a variety of products, all to enhance the user experience and position them for future growth. So, how will this affect you – the user?

 

Acquisitions

In October, 2015 Pandora purchased Ticketfly for $450M to compete with other ticketing sellers. The Ticketfly acquisition allows Pandora to increase relationships with musical artists through their Artist Marketing Platform and cross-promote on Pandora’s traditional service to help drive sales for concerts and events. This purchase also allows Pandora to “own” the transaction from artist to user, and will allow them to collect 1st party data for more targeted marketing efforts.

 

In 2016, Pandora also purchased intellectual property and technology from Rdio, a streaming music service that declared bankruptcy in November, 2015. Pandora needed this technology to develop its on-demand streaming product, to reach listeners who want more control over their music selections. This move will help Pandora to compete with Spotify here in the US and around the world. Pandora also brought on several of Rdio’s employees to build their licensing department and pursue direct licenses with labels and publishers.

 

Improving Relationships

In late 2015, Pandora struck a deal with Sony/ATV Music Publishing to benefit two parties that have been on opposite sides for many years over the artist compensation issue. This direct licensing deal helps Pandora work around the traditional ways of securing performance licenses. It also locked them in for long-term rates to avoid future rate fluctuations and was a major step in bridging the gap between the streaming giant and the artists they feature.

 

New Products

Pandora also implemented changes to its Pandora One product. This monthly, paid service still offers an ad-free experience at a $4.99 price point for 3.9M subscribers, but the name changed to Pandora Plus. Pandora made several improvements to the service itself, offering additional song skips, unlimited replays and offline listening.

 

With the help of the Rdio purchase, Pandora launched a second Paid subscription service called Pandora Premium. This $9.99 monthly product features on-demand listening, allowing users to create custom playlists. Pandora’s genome project follows the user’s listening patterns and “thumbs up” or “thumbs down” interactions to make customized recommendations for users – another enhancement to the service. The Search feature is upgraded as well, now customized per user. Pandora Premium also highlights a New Music section that gives users recommendations for full album listening, based on the user’s behaviors. The Premium product will not only help Pandora to compete with Spotify for younger listeners, but should also improve time spent listening.

 

Improving the User Experience

Pandora implemented a variety of updates to improve the user experience, particularly for mobile users. They introduced Responsive 300×250 ad units that automatically adjust to fit the user’s device, and appear where the album artwork is displayed. In addition, Pandora implemented a “Swipe left” function that eliminated the “X” in the upper right corner of ad units. Taking a cue from their users’ natural tendencies to swipe left, Pandora made the experience more user-friendly, and eliminated some of the “fat finger” clicks that inflate click-thru rates. Additional skips and replays were also included with the basic Pandora product to encourage increased listening.

 

Pandora now offers Sponsored Listening of an artist or musician that highlights a paid advertiser and gives the user one or four hours of ad-free listening. Advertisers receive 100% SOV, connecting the brand with the listener, and increasing overall engagement. In addition, Pandora now offers a muted video function, a Countdown Clock and Sequential Messaging. The muted video function plays music in the background while the user watches the video unit. This should increase time spent on the app and increase video completion rates, making Pandora a more palatable option for video ad campaigns. The Countdown Clock allows advertisers to focus on specific events or time-sensitive promotions, while Sequential Messaging lets advertisers serve relevant messaging to a user based on their previous interactions.

 

From an advertiser’s perspective, we are always looking for ways to reach our target audiences on a platform they use frequently. Also, we are hoping for improved engagement, more realistic back-end statistics and a stronger ROI with these changes. Better yet, these improvements should enhance the user experience and increase time spent on the platform. Ultimately, we believe Pandora will start to appeal to a younger, more mobile-friendly audience, and we may see impressions shift almost exclusively from desktop and tablet to mobile devices over time.

 

 

Sources:

http://www.adweek.com/digital/why-pandoras-muted-video-and-responsive-display-ads-are-big-hit-advertisers-175349/

 

https://www.forbes.com/sites/georgehoward/2015/11/25/confusion-is-next-pandora-buys-rdio-whats-an-artist-to-do-part-1/#2ae9cfbf5f01

 

http://www.billboard.com/articles/business/7263838/pandora-ticketfly-ios-app-why-and-how