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RAIN 5/20: Pandora launches featured-packed subscription plan, predicts a profitable 2010

Posted on: 05/20/2009


Pandora announced a slew of new features and updates today that may help the company realize founder Tim Westergren’s vision of a profitable 2010. Westergren (pictured left) recently spoke with Bloomberg (here), explaining that Pandora’s revenue may double to $40 million next year, making the company — for the first time — profitable. He credited the success to Pandora’s popularity on mobile devices like the iPhone, but hinted that performance royalties are still the “primary barrier to reaching profitability.”

Today, the company launched Pandora One, a subscription plan that exchanges five premium features for a $36-a-year price. Those features include not only removing all ads on the site and in the audio stream (the major draw of Pandora’s first subscription plan), but also a downloadable desktop application built on Adobe’s AIR Platform (pictured right), the ability to stream music continuously for up to 5 hours without Pandora cutting off the stream or checking to make sure you’re still listening, and a personalized look feature that lets you choose the background for your web-based Pandora player. The subscription plan also delivers music at 192Kbps, a rate TechCrunch notes is a “higher quality sound than iTunes used to sell its music at.” TechCrunch also notes that users of Pandora’s previous subscription plan will be upgraded to Pandora One. Find more on Pandora One from TechCrunch here.

Pandora also announced today a partnership with Gracenote to bring song lyrics to their web player. Users can now view the lyrics to currently playing tracks (more at Blorge here). Users can also stream the new Dave Matthews album “Big Whiskey and the GrooGrux King” in full at Pandora starting May 26, a week before the album’s release date. The album debut is sponsored by Brita’s “Filter for Good” campaign, which includes homepage takeover tuner skins, mobile banner ads and Brita’s own FilterForGood.com branded radio station. Find the press release on the Matthews/Brita campaign here. Ford also recently announced that users of their Sync Radio would soon be able to stream Pandora stations to their car radios when Sync is updated in 9 to 12 months (RAIN coverage here).

Approaching all of this news from a satellite radio perspective is Sirius Buzz, which claims Pandora is now “top dog” and that their new user numbers dwarf those from Sirius XM. “How happy would investors be if SIRI was adding 1.5 million new users per month… it is probably safe to say that most would be happy if they added that many for the entire year of 2009…It seems to me that for the time being, Pandora is here to stay.” Read the entire Sirius Buzz article here.


New research from BIA Advisory Services found that radio collected $342 million in online revenue during 2008 and projects that the industry could earn $1.9 billion from the Internet by 2013. This will only happen “if the industry continues its transformation to multiplatform solutions,” BIA notes. Mark Fratrik, BIAfn VP, expects online radio advertising to grow at a compounded annual growth rate of 18.6% through 2013. “Given the challenges facing broadcasting, it’s even more important for broadcasters to continue to step-up their mobile and Internet offerings,” he stated. For more, check out Radio World’s coverage here.

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