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

http://phandroid.s3.amazonaws.com/wp-content/uploads/2013/02/pandora-banner.jpg

http://phandroid.s3.amazonaws.com/wp-content/uploads/2013/02/pandora-banner.jpg

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

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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.


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Pandora’s Revenue Streams (millions)

82%

19%

Paid SubscriptionsAdvertisements

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%

PaidUnpaid

Current

98%

2%

PaidUnpaid

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%


Current

69%

31%


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:


http://images.mobilenapps.com/data/images/full/6973/pandora-one.jpg?w=500



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.


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


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


http://sonicweekly.com/articles/wp-content/uploads/2012/09/PRO-Logos1.png

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.


“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.


http://www.pandora.com/account/register

Learn More About 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.





Pandora Radio’s SolutionLearn More About Pandora One

Current Pandora Android Application with Ad

Current Pandora Android Application Menu Bar

(Where’s Pandora One?)

Current Pandora Android Application Pandora One

Upgrade Banner (only visible when ads present)

Current Pandora Android 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.


http://blog.pandora.com/2014/03/18/6128/comment-page-1/

http://blog.pandora.com/2014/03/18/6128/comment-page-1/


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


http://investor.pandora.com/phoenix.zhtml?c=227956&p=irol-presentations

http://investor.pandora.com/phoenix.zhtml?c=227956&p=irol-presentations

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.


http://cdn.arstechnica.net/wp-content/uploads/2011/01/music-genome-list-ars.jpg

http://cdn.arstechnica.net/wp-content/uploads/2011/01/music-genome-list-ars.jpg

Registered Users of Competitors

85%

9%

7%

Pandora RadioSirius XMiTunes 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 Million1% of Registered Users Making the Switch to Pandora One’s Annual

SubscriptionWednesday, May 21, 14

Still to come: Effect on company’s operations,

communicating the solution to customers, ethics & responsibility, evaluating the

strategy’s success.

Thank you! Any questions?


Education

Green Team Draft