Donnelly+blog+analysis

TO: Proximity music team FROM: Ian Donnelly SUBJECT: Washington Post article on Pandora DATE: January 4, 2010

We were asked to analyze a blog post or news item to help us prepare Proximity's winter survey. Below is my summary of a //Washington Post// article on the growing popularity of the online music service Pandora. I suggest we include questions on the winter survey designed to determine whether people are turning to Pandora as the new model for radio and if they are utilizing the advertisements on Pandora to legally find music.


 * What Pandora provides

Pandora is one of the only online music services that is growing in popularity, and has increased its users by 400% in 2009. According to MG Siegler in the //Washington Post,// Pandora adds 600,000 users per week and has ultimately achieved 40 million registered users. The service works as an internet radio website, where users cannot choose specific songs but can narrow the content by genre, and currently accounts for 44% of all internet radio listening hours. This success was met with opposition from the recording industr y over royalty rights, but Pandora was able to settle for an acceptable deal that allows them to survive as a business and hope for profit within the next year.

Advertisements, which make up the bulk of Pandora's profit, are effective and targeted at a promising demographic: 18-24 year olds. Pandora has twice as many visitors as Hulu and ESPN and has benefited from the rise of smart phones, with more than half of its users streaming music through mobile devices. Pandora has become the new leader of internet radio because of the easy access through smart phones. **


 * Why Pandora's Service is important **

Pandora's service illustrates two trends which are now changing how Gen Y views online music:


 * Pandora is one of the few music services that is able to survive with a heavy weight on advertising for profit. Its model relies on these ads and the rise of mobile smart phones has boosted the company.
 * Pandora is the leading company for internet radio, and the use of smart phones has made it accessible to anyone at anytime. The company has a major effect on the way people listen to music on the internet and the radio as a form of media.


 * Questions to ask**

In addition to determining how TU students use internet radio, we need to find out how they view the advertisements on these sites. The music segment of the fall Proximity survey should include questions such as the following.
 * How often do you listen to the radio?
 * How often do you listen to online music services such as Pandora?
 * Have you ever utilized advertisements through online music services such as Pandora?

Proximity clients need answers to these questions in order to understand how the online music service Pandora is changing Gen-Y's view of radio and advertising in music.

__Reference__

Siegler, MG. (2009, Dec. 16) As Online Music Falters, Pandora Doubled to 40 Million Users This Year. The Washington Post, TechCrunch. Retrieved Jan. 4, 2010 from http://www.washingtonpost.com/wp-dyn/content/article/2009/12/16/AR2009121602990.html