Pandora internet radio(www.pandora.com) operates at the pure play business level, existing solely on the internet. Pandora was founded in 2000 by Tim Westergren and since then has rapidly developed into the largest online music service, with over 20 million registered users and still growing. Pandora also acting as one of the most popular applications on the Apple iPhone. Pandora has developed valuable partnerships with big industry players such as AT&T, HP, Samsung, and Sprint and advertisers HP, Microsoft, Honda, Proctor and Gamble and Nike, that allow the site to stay well-funded. Pandora's personalized radio service has redefined the way music-lovers discover new music while listening to their favorite artists and songs.
Pandora makes use of the subscription business model in generating revenue, since it provides subscribers with opportunity to purchase songs, and entire albums by their favorite artists, working as a content service. Since it also operates as a community model, providing a social network where users can share music and personalized stations with friends. Pandora in having established very successful partnerships with industry leaders, has also managed to generate the most profit based on the affiliate business model, incorporating revenue sharing with top brand names, like Apple. The image below shows how users, in addition to establishing their own personalized stations, they can create their own blog discussing the music they have discovered and enjoyed.
Pandora recently expanded its reach by going mobile, so now subscribers can access their already existing stations while they are on the go and also create new ones. Accessing Pandora from one's blackberry, iPhone, or other smart phone, grants the user the same mobility with the site that would exist if they logged in from their own computer.
Performance Metrics
I think the site is verifiably successful at providing a unique service to its users. In order to gage this success, Pandora can look at how many users it gains per quarter, and how much music they purchase individually. Also, since the partnerships with industry and advertising leaders has kept the business well-funded, calculating the responses of users to the banner ads, number of clicks for example. Pandora should also do qualitative research to judge the success of the social community, including reading user blogs, and seeing how they utilize this environment.
Your review of Pandora's business models is well researched and summarized. The performance indicators also look appropriate for this type of business. Well done, Alex.
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