Pandora

Pandora‘s business model consists of actions that lends the company to operate as a B2C, content provider, e-commerce site. Both the original business plan and the secondary plan in late 2005 supported the consumer market of “enjoying accessible music”. In assessing Pandora’s two business models you see that most of the originating or base elements stayed the same in each model but some key elements changed. These element changes were major catalysts in leading Pandora through its venture from a company who in late 2005 was faced with major financial issues, to in 2013 the most successful business for subscription to radio service. Pandora coming into the race had a first -mover advantage because they were the first on the music supply scene with an algorithm that puts together a personal radio station based on the consumer’s tastes. This algorithm customized the consumers experience by basing its selections not only on the selected artist but also favorite musician and closely related music by different artists. As part of dealing with the competitive market Pandora’s main business strategy was to differentiate itself from competitors like I-tunes and P2P sites by focusing on the value its customization tools provided to the users. Being able to offer more personalization and accessibility expanded Pandora’s market space.
The management team at Pandora took a risk and changed some key elements in their business model which gave the company the ability to expand the consumer base while creating loyal customers willing to pay for premium service. The first major change was in November of 2005 Pandora gone from having a subscription based revenue plan to an advertising revenue plan. The original plan was to offer 10 free hours and then give the option to purchase a yearly subscription of $36 dollars to continue the service. The problem here was that there weren’t very many people converting from access to the free trial to actual paying subscribers.