Abercrombie & Fitch Marketing team Pandora Radio Anqi Wang Dongqi Wang Jing Xu Jing Zhang Ni Su Yueqi Meng

CONTENTS 01 · Background and Objectives 02 · Methodology 03 · Areas of Discussion 04 · Key Findings 05 · Conclusions and Recommendations

Background Pandora is a music streaming and automated music recommendation service.

Number of Pandora's active users from 2009 to 2014 (in millions) Background Number of Pandora's active users from 2009 to 2014 (in millions) Total Revenue increases by 30% Advertising Revenue increases by 31% Subscription and listener base increases.

Problems Competitors Most of Pandora’s competitors are more customized and allow audiences to choose music freely

revenue-model-comparison Problems Figure from 2015, Pandora is actually losing subscribers revenue-model-comparison 2015, Compare to its competitor Spotify, it is losing the battle Potential Risks

Pandora is not as popular as it was several years ago Problems 2013-2014, The growth rate of active users of Pandora decreases significantly 2013-2014, Revenue growth rate from advertisement is decreasing Pandora is not as popular as it was several years ago

improve Pandora’s popularity and increase active users Objective Determine the reason why Pandora is not popular among users anymore. The research will be used to develop an effective method to improve Pandora’s popularity and increase active users

Qualitative Research Focus Group Dyads Methodology Qualitative Research Focus Group Dyads Active Group Non-active Group Dyads Advantages: Two respondents in each group have same interest Separate different kinds of interviewees and avoid cross influencing

Respondent's characteristics Methodology Aged between 20-30 youngsters Both male and female Respondent's characteristics Smart phone users.

Screening Requirements Methodology Like to listen to music on mobile Used Pandora radio Screening Requirements Keep using Pandora radio/ Switch to other music apps Have not participate in a market research study for past 6 months

We developed two discussion guides: Areas of Discussion We developed two discussion guides: One for active users, the other for non-active users In what conditions do you use music apps? What features of Pandora do you like/ dislike? Why do you choose to pay/not pay? If Pandora is a person, how would you describe it? Any recommendations for Pandora? Main topics

Non-active users (Sean & Stephanie’s group) Key Findings Non-active users (Sean & Stephanie’s group) Turn to Spotify from Pandora Use Pandora for Background music Cannot choose music on Pandora No willing pay for ads Stephanie Sean

Active users (Sebastian & Lars’ group) Key Findings Active users (Sebastian & Lars’ group) First one and free No willing pay for ads Like thumb up function limited skipping function doesn’t bother them Lars Sebastian

Active users (CiCi & Sam’s group) Key Findings Active users (CiCi & Sam’s group) Use Pandora when bored, commuting, before bedtime, working, showering, working out, studying Pandora is a friendly person No willing pay for ads The long history of providing music streaming service gives a great reputation for Pandora.

Non-active users (Manson&Dorothy`s group) Key Findings Non-active users (Manson&Dorothy`s group) use apps to listen to music when they are working&showering,etc. paid users of Spotify, less ads and more flexibility Can not search the songs & annoying ads on Pandora For pandora, they can add any favourite song into the playlist and access it later. Often while at home or doing exercising, they will just play on that playlist of all songs that they have liked.

Conclusions Conclusions: Pandora still has a high reputation as it is the first music streaming service. Pandora has bases of loyalty customers especially who prefer to go with tradition. However, history is history. The history is sweet but the reality is so cruel. Pandora cannot remain stagnant as competitors such as Spotify has stolen Pandora’s customers. In this condition, Pandora has to make some changes to bring more value to customers and stole customers back from Spotify.

Suggestions Suggestions: (Tactical and Strategical) Tactical: Add features for saving or repeating a song so that the same song can be played again Create own stations with selected songs Try to improve and allow more skips Strategical: Add more other language(such as Chinese) songs Expand availability outside nation

Q&A Any questions?

Pandora Radio Abercrombie & Fitch Marketing team Thank you! Team 2