E-Commerce and E-Business

In: Business and Management

Submitted By johnson01012012
Words 651
Pages 3
E-commerce and e-business

Introduction

Pandora offers online radio subscription services. Glaser and Westergren founded Pandora back in 2005. According to Kenneth and Traver (2012), Pandora has over 80 million registered users and continues to add about 600,000 subscribers a week. The firm accounts for over 50% of all online radio listening hours. When I read about Pandora offering a radio service, I first though about news but it wasn’t event the case. It’s all about music from a radio that doesn’t work like the one we always listen to that I will refer to as traditional radios for the purpose of this case study. With Pandora, the users select a genre of music they want to listen to and a computer program determines all of types of music related to along with other artists they might be interested to listen to their music. I will first compare describe Pandora’s original business model as well as its current business model, and then compare the two business models. I will also discuss if Pandora would have been successful if it had started out originally using another business model. I will therefore explain some of the concepts related to the case study such as free revenue and freemium revenue models. I will question the assumption that free revenue models have a predominant place in e-commerce.

Pandora’s business models

When Pandora was founded, the firm first business model was to offer its users 10 hours of free access as bait and then asking them to pay $36 a month for a year after they used up their free 10 hours. But that business models turned out to be ineffective because people were listening to their first hours for free and then wouldn’t pay for the annual service. The business model was therefore inefficient too and resulted in a near financial collapse.
In 2005, Pandora a new business model that offer the possibility to listen to…...

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