Gratis anyone?

Ever heard that great song on the radio or on that iPod jog that you wish you could blast on the computer when you got home? Or what about songs by a particular artist or in a specific genre that you can't get enough of? Sure, iTunes can do all that, but there's a somewhat similar, web-based program for people who refuse to download iTunes or feel as though the "related music" in that program is blatantly out of sync with their musical tastes. In addition to all of this, it's free....yes f-r-e-e! The newest craze in the virtual music world is called Pandora.


Pandora is Internet radio from the Music Genome project. It was founded on the premise that each individual has a unique relationship with music; in essence, no one has identical musical tastes. In this regard, Pandora's sole mission is "to play music you'll love-and nothing else". The rating tool on Pandora allows users to take control of the music they hear in future sessions. With respect to free pricing strategies, Pandora has elements of "Freemium", "Advertising model", and "Zero marginal cost" pricing strategies.

Anyone can visit Pandora and listen to music for free, albeit for a limited amount of time. To take full advantage of the free service, users are encouraged to sign up and enjoy as much music as they want. The free version of Pandora includes advertisements, but these ads are visual in nature as compared to audio/sound ads on similar music sites like Yahoo! radio which actually cause a break in the music. In this regard, unless the user is glued to his/her computer and viewing the ads, there will be no indication that an ad is in progress. This is an example of the Advertising model pricing strategy, which is characterized by free content sponsored by advertisers.

Pandora's free and paid versions have different service options for subscribers. For instance, once a user signs up, his/her Pandora account will also allow them access to the basic version (with visual ads), Pandora on the Web (ad free version), and Pandora on the Go (for mobile phones). Pandora subscriptions are $36 for a one-year subscription while Pandora on the Go subscription costs vary depending on the user's mobile phone carrier. The subscription version of Pandora, unlike the basic offering, removes all external advertisements. These two options exemplify the Freemium pricing strategy as described by Chris Anderson. A Freemium pricing strategy has different tiers of content ranging from free to paid versions of the product.

One downside to Pandora's service is that despite the user's subscription level (paid or free), the company's licensing restrictions do not allow users to skip songs (or places a cap on allowed skips), do not permit rewinding or replaying, and require periodic interaction with the Pandora Tuner (time-out function). The time-out function is activated after 2 hours of inactivity with the site.

Pandora on a whole is a great tool for users and is changing the way music is distributed and how people listen to music online. The free version differs minimally from the paid version on many facets but the site demonstrates how pricing strategies are influencing the movement from paid to free versions of programs. The service itself illustrates the zero marginal cost pricing strategy, which is based on the premise that digital content like music can be distributed at virtually no cost to large audiences (such as Pandora subscribers). The licensing restriction is the major hurdle for users as it doesn't allow replaying or rewinding but apart from this, the service is great in terms of customizing playlists for specific tastes and interests.