Rabassa

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Strategy report
//TO: Proximity music team FROM: Matt Rabassa DATE: September 28th, 2009 SUBJECT: Pandora Strategy Analysis

This is my Pandora Radio strategy analysis. While internet radio is not a new concept, the way it is formatted has been changing. Pandora, a free radio site, appears to be king of the hill. Ss long as they continue to accommodate to Gen-Y, they will continue to dominate the internet radio market.

Profile

Pandora, and any free radio site, streams music to a computer anywhere that has internet access. Users can hear their favortie shows or music whenever they want, all at their finger tips. Almost all major radio stations - AM, FM, and even some XM - all have their own personal site where users can listen, for free, 24/7.

Pandora's Strategy

The difference between Pandora and the others is not what it streams, but how it streams. Instead of normal airtime programming being played over the internet, the user picks certain artists they like and using 2,000 focus traits, Pandora finds other artists and songs that are similar to what the user is listening to. If the user approves the song being played, they select the "thumbs up" and the artist’s song and info are saved. If the user doesn't like the song, "thumbs down" changes the selection to another artist's song that is similar to ones they have previously selected. Over time, a small database is filled up with songs and artists each registered user likes and will play through like a radio station on playing songs they like. Users have access to 40 hours of free time each month with small commercial interruptions, or can choose to pay $.99 for free listening the entire month. Repeat and rewind, however, aren't options for the user.

Landscape

Since radio on the internet isn't a new concept, the amount of other companies doing it is large. There are easily over a dozen sites like Groove Shark, Stitcher Radio, and MeeMix, all providing the same type of streaming radio Pandora has. The difference is Pandora does it on a much more user-based system, letting users picking the music they want to hear, not the same programming they get from using an ordinary radio. With 30 million registered users, 2 million with an iPhone application for the service, and over 600,000 songs in their database, Pandora is undoubtedly the king of streaming internet radio.

Gen Y

The main point we should focus on is whether Gen Y will adaopt the internet radio idea and apply it to their moible devices like iphones, or if they get more use out of having it on any desktop computer. With Rhapsody, as long as you have a computer with internet access, you have streaming music at your finger tips. With Pandora and the iphone application you can have access anywhere you go, the only drawback being battery power.

References

Welch, Vickie. Pandora's Radio Ad Sales Initiative Strikes a Harmonious Chord With Advertisers (July 7, 200) http://www.reuters.com/article/pressRelease/idUS93546+07-Jul-2009+MW20090707

Wikipeida http://en.wikipedia.org/wiki/Pandora_radio//

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