Pandora is the leading internet radio service. It redefines radio through revolutionizing the way people discover new music. Pandora is streaming personalized music and comedy to tens of millions of listeners which were based on each user's individual preferences. Music Genome Project powers the personalized radio services, the most comprehensive analysis of music ever undertaken. Pandora crafts personalized radio stations for more than 150 million registered users by using this musicological “DNA” and constant listener feedback
Pandora Company had chosen to create a business application landscape based entirely in the cloud; so that any new financial system had to be easy for using, cloud based, flexible. They are also open to exchanging data with other cloud solutions. Bringing structure, infrastructure and analysis of key areas of the business were the biggest challenges that are faced by team of Pandora
It’s key challenge was to pick a system that helped them today and could scale with them in the coming years , that meant it was very vital to choose a flexible planning system capable of keeping pace with the rapid change. Pandora enters Anaplan. Open-plan was a great long term solution for Pandora both in terms of usability and data exchange with other cloud solutions.
Pandora’s value chain from the production of Content to listener-
The value chain of Pandora starts with the production of content. Musicians or artist of songs first starts with music, then record it after then start getting them into the hands of the customer. Next is Intermediary. These intermediaries are recorders or producer. Pandora negotiates with producers and receives, tracks. It also works with those companies which want to advertise through Pandora. These producers of music are behind what makes the music CD happen. They represent the musicians. Next is Chanel level. This level deals with mobile and online companies to provide streaming through their sites (channels). Next level is royalty collectors. These are companies who collect royalty to the owner. Next level is radio companies or online music services. The last level would be listeners
Listeners are listening to Pandora through the Internet, their mobile devices, or their radio. This is where Pandora comes into play through with radios station, and internet music services like YouTube.
The conflicts which impacts Pandora are Horizontal and vertical Horizontal and verticals, both conflicts impact Pandora. In horizontal conflicts, advertisers complain that advertisements through mobile devices bring more business in comparison to online. They strictly want their advertisements being shown online. With horizontal conflicts, vertical conflict impacts Pandora. Vertical conflicts state that mobile and online companies become upset with Pandora because it makes the advertisements smaller online or by making them less frequent on mobile devices.
Various alternative radio streaming companies and players which are available in the market impact the Pandora in the Horizontal conflict. The reason is that radio market has no closed loop network, which is dictated by area codes or other geographic locations. Because of this Pandora has risk to lose its listeners among the competitors. And the competitors are Spotify, the radio, online streaming, iTunes, or even YouTube.
The impacts on Pandora of the vertical conflicts are audio quality available to the company, the licensing for songs, the effectiveness of channels to stream their music, their intermodal transportation networks. Vertical conflicts also impact the company’s profits due to the loss in advertising sales. However, both horizontal and vertical conflict impact Pandora’s profits, quality, and expose to the consumers.
Pandora add value for customer through its distribution functions
Pandora implements a vertical marketing system in distribution functions which add value for its customers. The results of it that music producers have most holds over Pandora and if these producers don’t give rights to Pandora to play music, then Pandora would be at a loss without those tracks. But people want to hear the music and buy the songs because app makes easy it so these producers benefit from being on Pandora. It gives advantages to the customer by getting what they want. Pandora gives more chances of selection of music to customers, so they want to stay with them. In this way vertical marketing system in distribution function helps Pandora to add value for its customers.
Pandora will be successful in the long term
Pandora’s stock has a great high since 2011.shareshave increased around 15% since the stock initial offering but prices has increased about 100%.Pandora’s relative strength index level is around 80% in this time which show that the stock is overbought at the previous moments. It may be a reason for its pullblacklist earning is decreasing Quarter per Quarter. Now the consumer has many product alternatives. These options are as “free music”, some internet radio sites, some AM/FM radio and satellite radio such as Sirius XM. These all gives a disadvantage to Pandora. Pandora is trying to give strength to its marketing by attracting advertisers such as MillerCoors, LLC and Hallmark Cards Inc. their streaming service. Pandora needs a strong plan to challenge traditional radio and should try to attract some more advertisers. According to the Radio Advertising Bureau, they give a premium to reach listeners during commute hours.
After trading publicly now Pandora should show investors growth not only in revenue and subscribers, but also in earning. Because earning shows a stock’s long term success not revenue. Any company may be successful in the long term if they make long term policies for their capital expansion. Pandora has to learn that how to bring in more revenue and similarly it has to expand its music database. To get success in future Pandora has to increase its funds. Funds are very important to support future plans. Similarly Pandora has to acquire more songs. Otherwise, they will not able to reach certain target markets and fans of those genres. Pandora has to start to bring some changes so that they will continueto grow in the market and start to get more revenue.
So we can say that it is very difficult to argue that it is not a great product. But to survive in market competition, Pandora has to focus on its marketing and is R&D budgets. Pandora has to face a competition from Apple which has announced that it will launch its streaming radio service of its own called iradio. Recently, Google had also launched name Google play music all access. But Pandora users will not leave it because of switching costs. But radio can give a competition to Pandora because it will be easy to use with all Apple products. It may increase Pandora’s marketing cost to preserve its market share. There is no doubt that Pandora offers a great product, but its growing is not so high that it can offset its expenses. From a technical point of view Pandora stock has done well in the past year, but its business model is not showing profitable in the longer term. Again, Pandora has already taken advantage in name recognition they can face their challenges and continue to grow if they are among the first to keep up with technology. In doing this they have to have a solid plan to grow their revenue. We can conclude that Pandora has to improve its long term planning, more focus on marketing.