February 4, 2010

Radio Commercials Come to Pandora Internet Radio

The radio station you program yourself has been forced to sell advertisements. Is it what listeners want?

In order to remain profitable, Pandora is forced to insert commercials into the music you program. Royalty fees for online music stations are much higher than what broadcast radio stations have to pay. It's all a matter of survival.

Source: Wired Epicenter Faced with increasing broadcast fees and limited success with visual ads, Pandora, the streaming radio service that grew out of the Music Genome project, has begun including in-stream advertisements as a way to raise revenue.

Pandora previously experimented with in-stream ads, but scrapped the idea due to negative feedback. Now, however, it would appear that Pandora is feeling the pinch (the company also recently laid off staff) enough to give the ads another try, despite the initial negative reaction.

The new ads, which Pandora acknowledged via its Twitter account, began running yesterday when users reported hearing an short, 15-second ad for the Fox TV show Lie To Me. The initial ad showed up after listening to about 10 songs. For many the ad ran again about 20 songs later and then went away.

Naturally, listeners were not happy and number of Twitter posts were vehement in their objections, prompting Pandora to respond: "so you know, we did not take on audio ads lightly. We try to be extremely respectful of your listening experience, & promise to be prudent."

The ads will only be heard on Pandora’s free services, like the web-based application and the very popular iPhone app. Those of you who have paid the $36 yearly subscription fee for Pandora’s premium service will not be subjected to ads.

While it was nice to be able to stream Pandora for free with no ads, like so many free services on the web, it appears those days are over. Your options are to put up with the ads, pay the yearly fee (which is significantly cheaper than XM or Sirius radio) or move to another service like Slacker or Last.fm.

Although a number of users are up in arms about the change, with some promising to leave Pandora, most users seem to recognize that Pandora needs to make some money if it hopes to stay in business.

So how about it, Pandora listeners? Are the ads OK with you? Or will you be paying for premium, ad-free service? Or moving on to another free, streaming music service without ads?

1 comment:

  1. I'd really love to play Pandora in my business. If there was a way for Pandora to obtain the necessary licenses to sell Pandora for commercial purposes (like Sirius Business), I'd gladly pay for it.


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