Pandora is giving its free users the ability to
temporarily “unlock” premium features like on-demand
To get access, users will watch a short video ad
(Pandora is testing varying lengths of time).
This is something Pandora users have been asking about
for years, and seems aimed at jump-starting flagging user
growth, especially among young people.
For over a decade, the biggest complaint I’ve heard about
internet radio juggernaut Pandora is
this: you can’t play songs on demand.
Part of that changed earlier this year, when
Pandora rolled out a $10-a-month premium tier to compete
directly with the likes of Spotify and Apple Music. But if you
were using Pandora’s free product, you still couldn’t play the
exact song you wanted.
Now Pandora is fixing that problem by introducing a new method to
temporarily “unlock” its premium tier for free users who watch a
video ad on their smartphone.
Here’s how it works: You watch a video ad, then you get access to
on-demand (and other premium features) for a certain amount of
time before Pandora transitions you back into its free version.
The ad lengths will vary, though typically they will be 30 or 45
seconds, with a 15-second minimum watch time before you can skip
it. And while Pandora is also testing out different lengths of
“unlock” time, Pandora Chief Product Officer Chris Phillips told
Business Insider that these tests will be in the realm of 15
minutes, 30 minutes, or an hour. Phillips added that you would be
able to use the unlock feature “multiple” times a day, though the
upper limits are being tested as well.
This all seems like a great deal for listeners — and Pandora too,
because it gets a chance to upsell people to its slick
$10 product — but why are the music labels on board?
“A big thing was promoting new content, new music,” Phillips said
of the label support, which makes sense.
The most annoying thing about free Pandora was that you couldn’t
immediately hear that new single from a music superstar. And if
you were someone who didn’t subscribe to a premium service like
Spotify or Apple Music, you probably ran right into the arms of
YouTube to hear that new song — where the economics for music
labels have historically been pretty awful.
So the labels are on board, at least for now.
The teen problem
For Pandora, this new feature seems to take aim at an issue that
has been weighing it down: the indifference of teens. While
Pandora’s user growth has generally been stagnant of late,
the problem is worse with younger people.
A recent report from Piper Jaffray
showed just how much Pandora’s teen user base had eroded.
Piper Jaffray asked the question: “Do you listen to music on
Pandora internet radio.” Only 35% of the US teen respondents said
“yes.” In early 2014, 74% answered “yes” to the same question.
Here’s the chart:
But this new feature certainly has the potential to help in that
department. Phillips said young users “massively over-index” in
wanting on-demand control. “That is an expectation of that user
group,” he said.
The killer use case
The good news for Pandora is that the mix of on-demand and
lean-back listening the streaming service will now offer in a
free product is unique. On mobile, Spotify’s free users can only
listen on “shuffle” mode (functionally similar to radio), and
YouTube doesn’t have the personalized radio DNA that Pandora
The use case I can see Pandora excelling at is someone entering
the app to listen to one particular song, or album, and then
letting Pandora’s algorithms take over once it finishes. There
are many times when I’ve wanted to listen to one or two
particular songs, but didn’t want to play DJ for myself all day.
The larger question is whether that will be the formula to help
new CEO Roger Lynch reverse the usage trends that have
plagued Pandora for the past few quarters.