Freemium Takes Pandora Public

 

Case study: Freemium Freem ium Takes akes Pandora Public Group members: Joo Hye Soo Bui Phuong Anh Nguyen Ngu yen Thu Thuyy Duo Duong ng Pham Ph am Vy Le

 

CASE STUDY SUMMARY HISTORY OF PANDORA ABOUT FREEMIUM TIMELINE OF PANDORA SUCCESSFUL & UNSUCCESSFUL EXAMPLES OF PANDORA

CONCLUSION

 

HISTORY OF PANDO ANDORA RA Founders: Will Glaser and Tim T im Wester Westergren gren As of June 2016:

Pandor Pandora: a: most successful internet radio service Launched at: 2005 Had 250 million milli on registered registered users with 80 milli million on active users It was made to reduce the illegal download of music and charged 2015: 21 per billion hours music were streamed streamed by theradio usersstation 99 cents song and of provided the idea of personal to the users

 

 ABOUT THE FREEMIUM  FREEMIUM  - Freemium: giving giving product product or service for for fre free e and get the the profit from the customer who uses it for premium

Since marginal cost of digital products is almost zero so providi ng free product to customers did not cost much This can attract more users and also premium users which brings profit to the company

 

TIMELINE OF PANDORA PANDORA Pandora provided 10 hours for free at first and 100,000 users use d their 10 hours and refuse to pay for annual services and resulte d financial collapse They ad-supported 2005: a) Pay Payintroduced 99 cents per month afteroption using 40 4at0 November hours of listening b) Premium service off offering ering unlimited usage c) Just listen to 40 hours only and wait for another 40 hours for n ext month This attracted many users and advertisers including Apple to pay for it

 

TIMELINE OF PANDORA PANDORA

Added BUY option to each song which directs users to Amazon, iTunes, iT unes, and more

2008

Had added app for

Reputation increased. Reached 20 million users

Still yet to reach stock price and slowly dropped

Absorption of Rd Rdio io an and d Apple launched their own streaming service

iphone users

2008

2009

2014

2015

 

SUCCESSFUL & UNSUCCESSFUL EXAMPLES OF FREEMIUM  Unsuccessful example of freemium: 2009, they give basic of forfreemium free and charged fee for special features features Successful example : MailChimp

Baremetrics is developer of analytics compatible with stripe stripe payment pr In just a year, users increased to send 450,000 from previously MailChimp is their a company lets anyone e-mail to85,000 customers, customers, manage suocessing platform Users paidlists, for special features showed increased of 150% andting profit incr bscriber and track track the performance perf ormance of an e-mail e-mail marketing marke campaign It had lowest priced charged and even introduced free option eased 650% It had more subscribers of 11% compare to the competitors with 3% to They are recently having 8 million subscribers and sending over 200 billi 5% on e-mail But they were not able to keep up with the sudden increase in data pro cessing and customer canceled their subscription

 

CONCLUSION  Freemium is for product product which is easy to use and has large potentia en tiall user userss This is truly a good tool to attract the users with free options of  fered fer ed and more attractive attractive than the free trial services servi ces Need to have long-term customer It is good for companies with low marginal cost and who can su -pport -pp ort free free us user erss

 

PROBLEMS COMPANY FACED

THE 1ST PROBLEM

THE 2ND PROBLEM

THE 3RD PROBLEM

Pandora gave gave away 10 hours of ffree ree access, and then ask users to pay $36 a month for a year after they used up their free 10 hours. The result: 100,000 people listened to their 10 hours for free and then refused to pay for the annual service. Pandora has not yet shown a profit, and its stock price has steadily dropped since its high in 2014 Apple music appear appear.. At 1st Apple was their partner,, Pandora directed their partner th eir users to Itunes. In 2015, Apple launched their own streaming service, and became Pandora’s competitor.

 

THE COMPANY’S SOLUSIONS 

The 1st  problem: Introduce an ad-supported option. Give customers 40h/month free streaming. After 40h, customers might choose sign up premium package or do nothing and register next month.

The 2nd  problem: Made a flurry of acquisitions in 2015, including on-demand music service Rdio. Absorbing Rdio signified Pandora’s ambitions to directly compete compete with Spotify in on-demand music streaming, as opposed to focusing primarily on its radio model.

The 3rd  problem: Although Apple Music appears to be a strong competitors to Pandora, analysis still point out the steadily increase in users monthly of Pandora.

 

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90% of the selections even are anymore  

LESSONS FROM CASE STUDY  Business in Vietnam could apply “Freemium” into business with some adjustment to become more suitable with Vietnam’s market.

For example, there is another music streaming site has the same business model with Pandora, it is Nhaccuatui.com. This website also provides users with loads of songs which are available to download and together with it, they also have premium package for better music quality, and additional services. However, because of having too much songs being able to download freely and there are still holes in their system system make the number of premium users remains modestly. From this case, Nhaccuatui.com can apply other solutions such as, limit the range of free songs, create more convenient services for premium users, and so on.