Pandora Freemium Model

1093 words 5 pages
Michelle Resendes
Managing E-Business BA351

Pandora‘s business model consists of actions that lends the company to operate as a B2C, content provider, e-commerce site. Both the original business plan and the secondary plan in late 2005 supported the consumer market of “enjoying accessible music”. In assessing Pandora’s two business models you see that most of the originating or base elements stayed the same in each model but some key elements changed. These element changes were major catalysts in leading Pandora through its venture from a company who in late 2005 was faced with major financial issues, to in 2013 the most successful business for subscription to radio service. Pandora coming into the race had a first
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Most consumers start their search for music by trying to figure out why one site and not the other. Why Pandora??? The value proposition Pandora offers its potential consumers is the customization the site offers, how user friendly it is, and the additional services. Some examples of value to the consumer is the customizability and personalization, easy access to purchase music you hear and like (prompted buy the addition of the Buy Button in 2006), greater usage and accessible via your mobile device (prompted from the creation of the mobile phone app in 2008) and also Pandora is almost like offering the consumer a personal music consultant which for free helps each consumer discover unchartered songs that he or she might not normally listen to. The addition of Pandora One the premium version of the site which offers no advertising, higher quality streaming, desktop app and fewer usage limits only adds to the company’s value.
Some company’s thrive using the “ Freemium” model and some do not. Mail Chip succeeded with the freemium model because they geared their business model to offer core services of their mail system to consumers for