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Strategy report
 TO: Proximity music team FROM: Lee Irvin DATE: September 23, 2009 SUBJECT: Pandora strategy analysis

This is my Pandora strategy analysis. Pandora is among the top 200 most popular United States Web sites (and climbing), and the Pandora iPhone application is among the App Store's 10 most downloaded. Gen Y will use this application if it offers them the best service with the least amount of ads.

**Profile **  Pandora is an Internet radio service that has the unique ability to recommend songs. Created by Music Genome Project; “Pandora allows Users to enter a song or artist that they enjoy, and the service responds by playing selections that are musically similar (Wikipedia).” By clicking thumbs up or thumbs down Pandora chooses the music best suited. More Recently on July 11, 2008, Pandora launched software for a mobile version. In 5 months 2 million people had downloaded and installed the software for their iPhone.

Tim Westergren is the founder of Pandora Radio. It started as an option for websites to match music for their customers in 2000. It turned into a free internet radio in 2005. 

Read more: __**[] **__ 

Pandora’s revenues come from two sources:

 
 *  Visual and audio advertisements
 *  Subscription of $36 per year

 **Competitive landscape **  Pandora competes with the music supplier. The music companies charge such high fee's that it makes the it difficult for Pandora to make profits. They pay music royalties on every song they play. Pandora founder Tim Westergren said “Almost 70 percent of Pandora's revenue goes to paying royalties (Beta News).” Besides that there are not to many companies competing with Pandora’s unique features. A few Internet companies are AOL Radio and Yahoo Radio.

**<span style="font-family: 'Times New Roman',Times,serif;">Pandora’s Strategy ** <span style="font-family: 'Times New Roman',Times,serif;">

<span style="font-family: 'Times New Roman',Times,serif;"> <span style="font-family: 'Times New Roman',Times,serif;"> <span style="font-family: 'Times New Roman',Times,serif;"> <span style="font-family: 'Times New Roman',Times,serif;">
 * <span style="font-family: 'Times New Roman',Times,serif;">Pandora has begun to battle royalty cost by introducing advertising.
 * <span style="font-family: 'Times New Roman',Times,serif;">they have capped the listening amount to 40 hrs a month.
 * <span style="font-family: 'Times New Roman',Times,serif;">they have decreased the amount of skips you can have from six to four.
 * <span style="font-family: 'Times New Roman',Times,serif;">they have removed their 3-dollar per month subscription fee to an annual 36 dollars per year.

**<span style="font-family: 'Times New Roman',Times,serif;">Gen-Y implications ** <span style="font-family: 'Times New Roman',Times,serif;"> Pandora is the best application for online radio. The only issue is that the music companies take out too much money leaving the company with little to no revenue, thus it is unappealing to Gen Y consumers. Pandora’s biggest challenge is to make a mandatory subscription without losing companies.

<span style="font-family: 'Times New Roman',Times,serif;">Conneally, T. (2008, August 19). //<span style="font-family: 'Times New Roman',Times,serif;">Pandora: Last gasp for Internet radio can't be further prolonged // <span style="font-family: 'Times New Roman',Times,serif;">. Retrieved September 23, 2009, from <span style="font-family: 'Times New Roman',Times,serif;">__http://www.betanews.com__ <span style="font-family: 'Times New Roman',Times,serif;">

//<span style="font-family: 'Times New Roman',Times,serif;">Pandora // <span style="font-family: 'Times New Roman',Times,serif;">. (n.d.). Retrieved September 23, 2009, from <span style="font-family: 'Times New Roman',Times,serif;">__http://pandora.com__ <span style="font-family: 'Times New Roman',Times,serif;">

//<span style="font-family: 'Times New Roman',Times,serif;">Pandora (music service). // <span style="font-family: 'Times New Roman',Times,serif;"> (n.d.). Retrieved from <span style="font-family: 'Times New Roman',Times,serif;">http://wikipedia.org <span style="font-family: 'Times New Roman',Times,serif;">

<span style="font-family: 'Times New Roman',Times,serif;">Blog proposal
<span style="font-family: 'Times New Roman',Times,serif;"> //<span style="font-family: 'Times New Roman',Times,serif;">paste blog proposal here //<span style="font-family: 'Times New Roman',Times,serif;">

<span style="font-family: 'Times New Roman',Times,serif;">Report proposal
<span style="font-family: 'Times New Roman',Times,serif;"> //<span style="font-family: 'Times New Roman',Times,serif;">Version:1.0 StartHTML:0000000187 EndHTML:0000009471 StartFragment:0000003810 EndFragment:0000009435 SourceURL:file://localhost/Users/leeirvin/Documents/ENGL%20317/FinalProposal.doc // <span style="font-family: 'Times New Roman',Times,serif;">TO: Proximity Media Teams <span style="font-family: 'Times New Roman',Times,serif;">FROM: Lee Irvin <span style="font-family: 'Times New Roman',Times,serif;">DATE: Nov. 25, 2009 <span style="font-family: 'Times New Roman',Times,serif;">SUBJECT: Final Report Proposal <span style="font-family: 'Times New Roman',Times,serif;"> **<span style="font-family: 'Times New Roman',Times,serif;">Introduction ** <span style="font-family: 'Times New Roman',Times,serif;">Pandora has always been a unique service that provides a variety of music to Gen Y. With recent music services such as Google Music coming forth, what will make Pandora stand out? Music Genome Project is the answer. It “captures the essence of music at the fundamental level using almost 400 attributes to describe songs and a complex mathematical algorithm to organize them.” This exclusive property of Pandora sets it apart from the rest of music. **<span style="font-family: 'Times New Roman',Times,serif;">Needs Statement ** <span style="font-family: 'Times New Roman',Times,serif; font-size: 13pt;">· We need Music Genome Project because it allows us to listen to different types of music. <span style="font-family: 'Times New Roman',Times,serif;"> <span style="font-family: 'Times New Roman',Times,serif; font-size: 13pt;">· <span style="font-family: 'Times New Roman',Times,serif;">Patented analyzing software that “learns’ how to pick the perfect songs for you.” <span style="font-family: 'Times New Roman',Times,serif;"> <span style="font-family: 'Times New Roman',Times,serif; font-size: 13pt;">· <span style="font-family: 'Times New Roman',Times,serif;">A radio service where you can pause and even skip songs you don’t like. <span style="font-family: 'Times New Roman',Times,serif;"> **<span style="font-family: 'Times New Roman',Times,serif;">Report Contents ** <span style="font-family: 'Times New Roman',Times,serif;">I plan on focusing on music genome project and how it separates Pandora from other music companies. Next I will also list competitors and discuss how Pandora has unique aspects that no one else has. Finally I will fully explore the genome project and explain exactly how it organizes and categorizes music. I will give examples for support. **<span style="font-family: 'Times New Roman',Times,serif;">Sources ** <span style="font-family: 'Times New Roman',Times,serif;">Hamm, Eric. "Pandora Radio from the Music Genome Project." //<span style="font-family: 'Times New Roman',Times,serif;">Motivate Thyself // <span style="font-family: 'Times New Roman',Times,serif;">. N.p., n.d. Web. 22 Nov. 2009. <http://motivatethyself.com/review-pandora-radio-from-the-music-genome-project/>. <span style="font-family: 'Times New Roman',Times,serif;">

<span style="font-family: 'Times New Roman',Times,serif;">Team conference presentation proposal
<span style="font-family: 'Times New Roman',Times,serif;"> //<span style="font-family: 'Times New Roman',Times,serif;">paste team conference presentation here //<span style="font-family: 'Times New Roman',Times,serif;">

<span style="font-family: 'Times New Roman',Times,serif;">Sales letter and report prospectus
<span style="font-family: 'Times New Roman',Times,serif;">

Director of Marketing

I’m glad we were able to talk previously about Proximity’s Next Generation Media seminar regarding Pandora Radio’s need to promote its service to Gen Y consumers. Inside you will find a prospectus for the report I talked about explaining the how Pandora uses the Music Genome Project and also how we can implement ads in-between songs.

As you mentioned yesterday, Pandora knows that it needs to separate itself from all the other music websites to be recognized by Gen Y. It does this by analyzing choices and recommending songs. I know that Proximity can work with you to conceive a campaign that uses the customers favorite songs as a way to market to them.

We can supply you with question and answer results from customers to help us know what they want. Our faculty consultants can counsel your sales force on how to profit from the music service, and also how to be the most appealing to Gen Y. We can utilize the customers' favorite songs to divide them into categories; from those groups we can advertise them accordingly.

I would like for you to join us at Proximity’s Towson office for a group session on Pandora Radio’s Gen Y image. Once the meeting is done you can meet with members of our group to discuss how Proximity can help you meet your marketing goals.

Sincerely, Lee Irvin