wax&wires

Pandora Brings Back Audio Advertisements

Well, it’s no surprise that radio is hurting, especially internet radio. Web radio currently lives under the cloud of potentially having to pay both performers and songwriters for streaming their music, while traditional radio only pays songwriters. The double-dipping is not currently enforced, but there is always the potential for it, which has put enormous pressure for revenue growth on those in the streaming radio world. Pandora announced today that they would begin airing 15-second ads between songs, approximately every 2 hours. This is not the first time the premier internet radio supplier has toyed with advertisements. In 2007, Pandora played a 9-second McDonald’s ad each time a user changed stations. During that time, they saw a moderate backlash from the Pandora community. Responses on their blog ranged from, “I’m switching to satellite radio!” to “Can I get ads that reflect my musical tastes?”

This time around, two years later, most listeners seem to be more in tune with the status of online radio and the company’s volatility. Most of the responses offered encouragement and understanding as to why they would need to being running ads, and listeners seem to be willing to listen to a short ad if it’s the difference in Pandora staying up and running. A subscription program, called the Pandora “Premium Membership” is also being offered at $36/year, free of advertisements.

Founder and CEO Tim Westergren told PressDemocrat that Pandora would never run as many ads as on traditional radio.

“The fears people have about it overtaking the listening experience are unfounded,” said Pandora founder and CEO Tim Westergren in a phone interview Tuesday. “It’s going to be a fraction of what you hear on broadcast radio.”

To be honest, I have no idea how Pandora has kept afloat for this long with the simple banner ads that they run, and small associates commission from iTunes and Amazon on the off chance that a user buys the song playing. Just the bandwidth and copyright fees have got to be unbelievable. If I were Pandora, I’d even start charging $0.99 for their iPhone app instead of giving it away for free. It’s worth much more than a dollar, and perhaps the extra money would let Pandora acquire some more music and licenses.

This entry was posted on Wednesday, January 21st, 2009 at 9:36 pm. It is filed under wires and tagged with pandora, streaming, websites. You can follow any responses to this entry through the RSS 2.0 feed.