Pandora is now free
I spent a lot of time digging up new music a couple of months ago during the pre-launch period beta tests of the Pandora music service. I put together a list of interesting music that I found, and ended up purchasing a number of new albums, and put off signing up for their paid subscription service until I finished working through the new music. I thought the fee was OK ($12/quarter or $36/year) but I simply had too much other stuff to listen to, so it would have been wasted money until the backlog cleared a bit (all the CDs I found from listening to Pandora in the first place).
Given my experience (liked the service, liked the music, put off signing up temporarily when the fees started), and the opportunity for affiliate referral fees from Amazon and others, this move to a ad- and affiliate-supported service could end up generating more revenue in the end.
In addition to many new features (bookmarking, station editing, playlist improvements, etc.), Pandora v2.0 includes a free, ad-supported version. Listeners have the choice to subscribe and stay clear of ads, or use the free service, which will gradually incorporate advertising. What does this mean for you? You can now come back and listen to Pandora as much as you’d like for free–and all the stations you’ve created remain intact.
At a referral fee of 6% of sales, it would take around $50 of CD sales to directly replace the old subscription fee. However, many more users who would turn away if even a small payment were required might try using a free service. And Pandora is the sort of service that creates demand for new music that those “free” users might be happy to purchase from Amazon (or iTunes). I don’t know what their conversion rates look like, but if they look anything like my behavior, Pandora is far better off working on bringing in more music-loving users than trying to collect subscription fees.
See also:
- Pandora
- Pandora launch, DRM, and media
- Pandora is now free (at TechCrunch)
- Pandora : Version 2 (at Pandora.com)
