Streaming music service Pandora on Thursday responded to the long-standing user frustration that you couldn’t hear exactly what you wanted, when you wanted. Now, they’ll be able to do just that.
By viewing video ads, the company said, free users will unlock a temporary session of the company’s $9.99 per month Pandora Premium. (Users of $4.99 Pandora Plus can also do it.) Investors seemed to like the news Friday, the shares rising some 2.6% as of early afternoon.
The move should expose those free users to Premium, which has some fans here, while capitalizing from the comparatively high value of video advertising. In tests, according to one report, users overwhelmingly both accepted the terms and then viewed the ad.
Analysts at Raymond James called it “an important step forward,” though they didn’t change their rating, saying they were more concerned with user numbers. That underscores the larger challenge facing Pandora: Its battle for market share with Apple, Spotify and others. (Earlier this week, we examined the effect YouTube might have on the market next year.)
But the new option also represents follow-through on a commitment Pandora’s management made in an interview with Barron’s Next in November — and the delivery of a function to a digital media marketplace that increasingly demands personalization and tailor-made experiences.