Green Team Draft

Presented By: Sarah Sorkin & Samantha Swanson

http://phandroid.s3.amazonaws.com/wp-‐content/uploads/2013/02/pandora-‐banner.jpg
The Green Team
consists of Sarah
Sorkin and Sam
Swanson. We would
like to propose a plan
to Pandora Radio to
make the company
proﬁtable through
increased subscription
revenue.
Wednesday, May 21, 14

Pandora Radio’s Current Debt
-$27.017 Million
Since 2008, Pandora has
been experiencing net loss
year after year, with last
year placing them over 27
million dollars in the red.

Pandora Radio’s Current Debt
http://investor.pandora.com/phoenix.zhtml?c=227956&p=proxy
Even though the
company’s revenue is
increasing in leaps
and bounds each year
and breached 600
million in 2013,
Pandora must
implement a new
strategy if it ever
hopes to turn a proﬁt.

April 2014: 1.70 Billion Listening Hours
http://rack.1.mshcdn.com/media/ZgkyMDEyLzEyLzA0LzM5L3Nwb3RpZnl3aG9wLmJITy5qcGcKcAl0aHVtYgk5NTB4NTM0IwplCWpwZw/90aed760/71e/spotify-‐who-‐pandora-‐surges-‐past-‐150-‐million-‐registered-‐
users-‐81bd5da876.jpg

Since
every
1,000
listening
hours
costs

Pandora
approximately
$18
in
licensing

fees,
and
listening
hours
for
April
2014

were
1.70
billion,
the
company
is
currently

paying
roughly
$18
million
each
month
for

licensing
rights.
This
does
not
include

product
development,
administraEve,

markeEng,
or
any
other
costs
incurred
by

the
company,
which
are
all
increasing

markedly
each
year.

Pandora’s Revenue Streams (millions)
82%
19%
Paid Subscriptions
Advertisements
Current

Pandora
is
currently
aGempEng
to

recoup
these
costs
almost
enErely

through
paid
adverEsements:
last
year,

ads
accounted
for
81.5%
of
the

company’s
total
revenue.
Considering

Pandora’s
net
loss
of
$27.017
million
in

its
2013
ﬁscal
year,
this
is
not
a
suﬃcient

method
for
the
business.


Pandora’s Registered Users
99%
1%
Paid
Unpaid
Current
98%
2%
Paid
Unpaid
After

Only
1%
of
Pandora’s
250
million

registered
users
currently
pay
for

the
Pandora
One
subscripEon

service.
We
predict
that
the
new

campaign
will
convince
1%
of

registered
users
to
switch
to

Pandora
One
each
year,
which
will

double
Pandora’s
current
revenue

stream
from
subscripEons.


Pandora’s Revenue Streams (millions)
82%
19%
Paid Subscriptions
Advertisements
Current
69%
31%
Paid Subscriptions
Advertisements
AfterWhat
does
this
mean
for

the
company?
An
increase

of
roughly
$111
million

each
year,
which
would

successfully
break
its
cycle

of
deﬁcit
and
pull
Pandora

into
the
realm
of
proﬁtable

business.

Pandora Radio’s Solution
http://images.mobilenapps.com/data/images/full/6973/pandora-‐one.jpg?w=500

Our
plan’s
three
step
process
will

increase
user
desire
to
purchase
a
Pandora

One
subscripEon
through
three
methods:


1) Obtaining Licensing Rights &
Adding Discography Functionality

giving
Pandora’s
loyal
users
funcEonality

they
have
been
waiEng
for
by
allowing

them
to
stream
enEre
discographies

through
the
paid
service;


...increasing
product
awareness
by
providing

informaEon
about
its
beneﬁts
throughout
the

website
and
mobile
applicaEons;

2) Work on the Platform to Better Promote
Pandora One

...and
providing
a
more
convenient

method
to
pay
by
oﬀering
yearly

subscripEons
at
a
discounted
price
of
$50.
Pandora One
3) Adding Yearly Subscription Option


Many
of
Pandora’s
compeEtors,
such
as
SpoEfy
and

Rhapsody,
already
allow
users
to
stream
an
arEst’s

enEre
catalog,
and
Pandora
currently
has
a
discography

funcEon
that
provides
samples
of
each
song
for
the

listener.
With
our
proposal,
the
discography
porEon
of

Pandora’s
service
would
receive
an
upgrade
for

subscripEon
users
to
include
the
availability
of
full

tracks
to
be
streamed
on
demand,
instead
of
just

through
the
radio’s
shuﬄe-‐type
funcEon.

http://www.pandora.com/gogol-‐bordello/gypsy-‐punks-‐underdog-‐world-‐strike

This
step
of
our
proposal
is
targeted
towards
Pandora’s

loyal
user
base,
which
consisted
of
76
million
acEve

listeners
at
the
end
of
April
2014.
This
will
likely
be
the

most
costly
part
of
our
plan
to
implement,
as
Pandora

will
need
to
consult
with
a
copyright
and
licensing

lawyer
to
make
sure
it
has
the
proper
rights
for
this

funcEonality.
However,
we
expect
this
to
not
be
a

signiﬁcant
issue
since
the
company
already
has
the

rights
to
stream
the
songs;
they
are
just
not
on
demand.
http://sonicweekly.com/articles/wp-‐content/uploads/2012/09/PRO-‐Logos1.png


The
second
step
of
the
plan
involves
Pandora

promoEng
its
subscripEon
service
internally
by

adding
more
informaEon
and
links
throughout

the
website
and
mobile
applicaEons;
for

example,
on
the
discographies
page,
a
link
can
be

added
to
noEfy
a
listener
that
they
can
stream

albums
in
full
by
upgrading.
Pandora One
“Want to hear the full album? Upgrade to Pandora One now!”
http://www.pandora.com/gogol-‐bordello/gypsy-‐punks-‐underdog-‐world-‐strike

In
addi'on,
the
launch
page
of
the

website
should
include
a
link
to
the

Pandora
One
page,
detailing
the

beneﬁts
and
diﬀerences
between
a

free
and
paid
account.

Pandora One
http://www.pandora.com/account/register
Learn More About Pandora One

Pandora One
The
registra'on
page
that
is
currently
linked
on

Pandora’s
home
page
does
not
even
men'on
Pandora

One!
It’s
great
that
users
can
sign
up
for
free,
but
it

would
be
beCer
to
give
them
all
their
op'ons
ﬁrst.

Instead
of
this
Register
for
free!
box
being
centered

on
the
Register
page,
there
should
be
a
second
form

on
the
page
allowing
users
to
sign
up
for
Pandora

One,
with
a
link
to
more
informa'on.
http://www.pandora.com/account/register

Learn More About Pandora One
Current Pandora Android
Application with Ad
Application Menu Bar
(Where’s Pandora One?)
Application Pandora One
Upgrade Banner (only
visible when ads present)
Application Pandora One
Upgrade After Banner (Where
is the list of beneﬁts?)

Providing
a
more
convenient
method
to

pay
by
oﬀering
yearly
subscrip7ons
at
a

discounted
price
of
$50.
Script
not

ﬁnalized.
3) Adding Yearly Subscription Option
http://blog.pandora.com/2014/03/18/6128/comment-‐page-‐1/
Summarize
the

organiza/onal

opportuni/es
concerning

the
customers
and

collaborators.
Highlight

key
areas
that
are

applicable
to
your

business
proposal.

A
brief
company
overview
is

provided
with
an

explana/on
the
company

goals,
objec/ves
&
current

market
posi/on.


http://investor.pandora.com/phoenix.zhtml?c=227956&p=irol-‐presentations
Pandora Radio’s Goals

No Concern For Collaborators
This would be the slide
that details how the
genome project will still
hit the target market
for ad placement. As
there will always be
majority free users. our
prediction is a small %.
http://cdn.arstechnica.net/wp-‐content/uploads/2011/01/music-‐genome-‐list-‐ars.jpg
I really think this slide
needs to be here so we
can explain how pandora
will not loose their ad
revenue from this
change.

Registered Users of Competitors
85%
9%
7%
Pandora Radio
Sirius XM
iTunes Radio
Summarize
the

external
market;
what

is
going
on
with
the

compe//on,
and
the

business
climate.


Pandora’s Market Share
Summarize
the

external
market;
what

is
going
on
with
the

compe//on,
and
the

business
climate.

Share of total U.S. radio listening for
Pandora in April 2014 was 9.28%
This slide is not yet
complete!

Implementation Maximum Cost
$5,000 Implementing Web Design & Adding Pandora One
Yearly Subscription
$5,000 Legal/Licensing Fees
+
$10,000

Projection Dates/Time Frame
1 August 2014 - 1 October 2014/ New Web Design
1 August 2014 - 1 October 2014/ Adding Yearly
Subscription Option
1 August 2014 - 1 January 2015/ Obtaining Licensing
Rights & Adding Discography Functionality

Projection Dates/Time Frame Cont.
April 2015/ Expected 25% Increase in Paid Subscribers
August 2015/ Expected 50% Increase in Paid Subscribers

Out of Debt in 1 Year
1% = $111 Million
1% of Registered Users
Making the Switch to
Pandora One’s Annual
Subscription

Still to come:
Effect on company’s operations,
communicating the solution to customers,
ethics & responsibility, evaluating the
strategy’s success.
Thank you! Any questions?

Green Team Draft

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