The Freemium Business Model

In: Business and Management

Submitted By cacortiz4
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Case study 1 | Pandora | The Freemium Business Model | | Christian Ortiz | E-COMMERCE MODELS AND ITS APPLICATIONS MKT 640GEORGE ACKERMANOCTOBER 2013 |


Pandora Radio started as Savage Beast Technologies and was founded by Will Glaser, Jon Kraft, and Tim Westergren. Later on after nearly failing, the company was renamed Pandora Media and launched Pandora Radio on July 21, 2005 (Arrington, 2005). Pandora is an internet radio service, recommendation service, and the custodian of the Music Genome Project. Pandora works by users entering a song or artist that they like, and the service responds by playing selections that are musically similar. Users provide feedback on approval or disapproval of individual songs, which Pandora takes into account for future selections (Crunch Base, 2013). The Music Genome Project is the backbone of Pandora Internet Radio. The goal of the Music Genome Project is to take music and boil it down to quantifiable data. Every song in the Genome’s library is analyzed by a musicologist, which is usually a musician with a strong backgrounds in music theory. The musicologist then breaks down and rates over 400 attributes of every song, from the “soulfulness” of the vocals to the rhythmic and key changes in a given song. These 400 attributes are combined into larger groups called focus traits, and there are 2,000 focus traits. Some examples of these focus traits are rhythm syncopation, key tonality, vocal harmonies, and displayed instrumental proficiency. Once this is done, Pandora uses the music’s DNA and constant listener feedback and crafts personalized stations from its more than 800,000 songs that have been analyzed since January 2000 (Layton, 2013). In this paper I will cover Pandora’s original business model and differences from its current business model, the difference between those revenue models, and the reasons…...

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