Team A Presentation on PANDORA

Category: Entertainment

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PANDORA Listen to Free Music You’ll L ♥ ve

Pandora Media, Inc. Bio:

Pandora Media, Inc. Bio Founded in 2000/Launched in 2005 2009-2010: Profits/Presence realized Pandora: Greek for “all gifted”: Want to appeal to the musically-curious. Provides a personalized radio experience using the Music Genome Project® Musicologists typically have a four-year degree in music theory, composition or performance (450 distinct musical attributes analyzed) Stations launch after the listener plants a single “seed” - an artist, song or genre that they prefer

Product/Service Strategy :

Product/Service Strategy Customer-Value Hierarchy: Core Benefit: Musical Discovery Basic Product: Delivery of Underground Artists/Popular Artists to Music Fans Expected Product: Competing Products Augmented Product: Music Genome Project/Ticketfly/Data-Enabled Target Marketing Potential Product: Product Offerings & Global Market Share

Pricing Strategy:

Pricing Strategy Pandora Free personalized radio/Periodic Advertisements Q2 2016 Revenue - $265.1M (Y/Y Growth - 15%) Pandora One Subscription-based model ($4.99/month )/Ad Free Q2 2016 Revenue - $55.1M (Y/Y Growth - 1%) Ticketfly Pandora acquired Ticketfly on October 7, 2015 for 450 million Q2 2016 Revenue - $22.8M (Y/Y Growth - NA )

Pricing Strategy:

Pricing Strategy Reference Prices Spotify - Free version with ads or paid subscription at $9.99/month Apple Music - $9.99/month Promotional Pricing Receive a free month when you subscribe for 12 months Price Elasticity of Demand Elastic - Price affects demand Individuals can cancel their subscription anytime and use the free version

Customer Strategy:

Customer Strategy Segmentation Music Genome Project Algorithm that guides you, the listener to music you like, by collecting 1 billion listener signals a day to provide the personal listening experience possible Captures up to 450 attributes, ie melody, harmony, etc Strips favorite songs to parts and reverse engineers them Takes approximately 20 minutes to amass the data for a single song, which has been done for more than 700,000 song by 80,000 artists Pandora just rolled out their 1,000th audience segment

Customer Strategy:

Customer Strategy Targeting Advertising to targeted audience Data-mined by the Genome Project allows advertisers to create customizable brand campaigns to the consumers Positioning Customization Music Genome allows for an intuitive algorithm to provide an ever evolving playlist to the consumer’s desires Thumb Up/Down, skip function

Communication Strategy :

Communication Strategy Public Events Pandora Sponsored Events Concerts Specialized webcasts/podcasts Communication Channels Paid Media: TV ads Owned Media: in-app subscription offers. Earned Media: press coverage

Communication Strategy :

Communication Strategy Online and Social Media Marketing Try every channel to see what works Facebook, Twitter, Snapchat, Instagram, Google Plus Periscope live events Youtube channel Advertising Campaigns “The Next Song Matters” “#ThumbMoments”

Distribution Strategy:

Distribution Strategy Content Distribution Internet Service Providers Music Streaming User Interfaces PC Mobile Automobiles Apple TV Apple Watch

Distribution Strategy:

Distribution Strategy More than 80 million active users in: US /Australia / New Zealand Challenges of operation in foreign markets: Foreign customers’ preferences Language and cultural differences Foreign laws, regulations and tax consequences Fluctuations in currency exchange rates Protection of intellectual property rights

Strategy Effectiveness:

Strategy Effectiveness Segmentation and Targeting Effectiveness Segmentation Segment Onboarding: improved scalability of audience targeting systems; growth in targeting options Targeting Data mining through the Music Genome project allows advertisers to customize their brand advertisements to specific consumer groups more effectively than with competitors Positioning Allowing consumers to Thumb up/down and skip allows them to have control over their wants and desires; strong customer loyalty, increased popularity and a dominant market share

Strategy Effectiveness:

Strategy Effectiveness Product Offering Effectiveness Product Hierarchy Product Mix: Pandora-plus-Ticketfly Product System: Interactive benefits for listeners, businesses, artists and venues

Strategy Effectiveness:

Strategy Effectiveness Pricing Effectiveness Customer Value Triad Quality - Music Genome Project® incorporates Pandora’s Proprietary and Big Data Technology to deliver users the best music mixes on the market! Service - Pandora streams on all the major media platforms (Mobile, Desktop, TV, Car, Stereos) Price - FREE! (w/ ads) OR $4.99/month for unlimited ad-free streaming

Strategy Effectiveness:

Strategy Effectiveness Promotional Effectiveness Relationship Marketing Focusing on customer engagement Social Media and Sponsored Events Effective promotion for business customers Collaboration with artists and venues

Brand Awareness:

Brand Awareness Current Distribution Local sales presence in 39 US markets Recommendations Marketing campaigns Sponsor events TV ads

Global Footprint:

Global Footprint Global Market Share Pandora is available in the US, Australia and New Zealand Recommendations Acquisition of assets from Rdio Investments

Financials :

Financials ~ 80% of total revenue: Advertising Recommendations Improve the capabilities of mobile digital advertising Trying to capture more advertising customers during holiday seasons ~ 20% of total revenue: Subscription and other sources Recommendations Different levels of subscription Incentive subscriptions

Thank you!:

Thank you! Questions and Comments


References Agarwal, S. (2015, September 1). How Pandora evolved it’s social media marketing strategy. Retrieved from Blattberg , E. (2014, November 14). Pandora's priority: Engagement, not new listeners. Retrieved from Burns, W. (2016, April 18). Pandora Media Ignores Its Own Strategy In New TV Ad Launching On NBA Playoffs. Retrieved from Castillo, M. (2015, April 16). Pandora increases programmatic offerings, allows for demographic targeting. Retrieved September 18, 2016, from

References (con’t):

References (con’t) Gaille , B. (2015, February 26). Pandora radio business model and marketing strategy [Web log message]. Retrieved from Kelleher, K. (2013, October 28). Pandora at the crossroads. . Retrieved from Keller, K.L., Kotler, P. (2016) A framework for marketing management. Boston, MA: Pearson Lashinsky , A. (2014, November 11). These go to eleven:Pandora’s plans for growth. . Retrieved from http:// Maloney , P. ( n.d. ) Origin story: The founding of Pandora Radio. Retrieved September 10, 2016 from Pandora. (2016) 2016 Annual Report. Retrieved from

References (con’t):

References (con’t) [Pandora]. (2015, June 16). Pandora App in Honda. [Video File]. Retrieved from [Pandora]. (2016, April 18). Pandora / That Song :60 / The Next Song Matters. [Video File]. Retrieved from [Pandora]. (2014, September 21). Pandora # ThumbMoments with Lindsey Stirling . [Video File]. Retrieved from Pandora. (2016, August 24). Pandora Partners With Questlove , Unveils Questlove Supreme [Press Release]. Retrieved from Pandora. (2016, August 10). Pandora to Livestream Metallica’s August 20 Concert at Minneapolis’ U.S. Bank Stadium [Press Release]. Retrieved from

References (con’t):

References (con’t) Pandora. (2016, February 10). Pandora Reveals Initial Lineup in Its First Year as the Official SXSW Streaming Partner [Press Release]. Retrieved from Pandora | Advertising. ( n.d. ) Retrieved September 10, 2016 from Pandora|blog . (2013, May 16). Inside the comedy genome: The art of analyzing humor . Retrieved September 10, 2016 from Pandora|blog . (2015, December 14). Thumbprint Radio: A uniquely personal station inspired by all of your thumbs up . Retrieved September 10, 2016 from Pandora |Company. ( n.d. ) Company Profile. Retrieved September 10, 2016 from

References (con’t):

References ( con’t ) Pandora: Online Radio Industry. ( n.d. ) Retrieved September 10, 2016 from Pandora |Press Room. ( n.d. ) About the Music Genome Project®. Retrieved September 10, 2016 from Peoples, G. (2016, March 18). Pandora bought a ticketing company for a whole lot of money –Here’s why, and how it works. Retrieved September 10, 2016 from Seeking Alpha. (2014, July 2). Big data technology, streaming music, and Pandora’s competitive “moat.” Retrieved September 10, 2016 from

References (con’t):

References ( con’t ) Singer, N. (2014, January 04). Listen to P andora , and it listens back. Retrieved September 18, 2016, from Weissbrot , A. (2016, June 07). Pandora uses listener data for more robust segments. Retrieved September 18, 2016, from

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