Pandora Radio, the cool personalized radio station that recommends songs based on its Music Genome Project, has started serving audio ads. The high royalty costs associated with streaming licensed songs seem to have finally caught up to the service, which until now has primarily used image-based advertising. The ads seems to be fairly sparse, but have received enough attention that the company’s official Twitter feed just annouced “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.”
We’ve confirmed that the ads are appearing on Pandora’s main web-based service, and are trying to find out if the ads will begin appearing on Pandora’s incredibly popular iPhone application, which was the most-downloaded application on the App Store for 2008. The iPhone app launched over the summer without any advertising, and began implementing new image overlay ads in September.
Update: Pandora CTO Tom Conrad says that the iPhone version of the application is not currently running audio ads, but that they will likely appear at some point in the future (though there are no immediate plans to include them).
This isn’t the first time Pandora has experimented with embedding audio advertising into its streams – in early 2007 the company experimented with some ads that were met with an overwhelmingly negative reaction.
Users that are really can’t stand the ads (seriously, they’re not that bad) are invited to sign up for Pandora’s $36/year premium membership.
Thanks to Richard Bowles for the tip.
ad free for $36 a year? Better than XM/Sirius.
Exactly. I originally signed up just out of “this is so cool, they deserve my money” spirit. Have never regretted kicking them less than I’d spend on two cds per year.
I agree. I want Pandora to stay in business so I can keep enjoying their services. We’ve all been listening to analog radio all our lives with lot’s of commercials, but without the personalization that Pandora offers. I think this hybrid model is smart. They can eventually serve up very targeted ads which are less intrusive while giving us this ad-free option for a mere $3/month.
Except you can’t listen to Pandora in your car without doing some fancy smartphone trickery.
I was just introduced to Pandora during a road trip when my friend simply plugged his BlackBerry Bold into my car sound system. It was very simple and no fancy trickery was required. I gather you must have 3G service but that’s to be expected. Sound was great with no buffering or interruptions. I was duly impressed. Why would I pay for XM/Sirius unless I really want their specific formats and hosts/personalities?
Pandora is a great service, and I like the whole experience better than Last.fm. I, for one, am willing to listen to “prudently” used audio ads to get the service.
We’ll see how others react, but unfortunately, Pandora is being forced to do this.
I heard my first audio ad on Pandora on November 20th, 2008 and signed up for the pro version the immediately.
Exactly the response Pandora wants, I’d imagine.
I’m fine with audio ads as long as I have option to upgrade to ad-free and they offer an app for G1 in the near future.
Hey Jason,
Audio ads are coming to the iPhone app too (according to a tweet from Pandora).
I will not mind, as long as they are relevant.
I don’t mind the audio ads at all, and given a choice between that and paying, I’m fine with ads. What would bother me is if I have to listen to ads for 3 minutes just to hear one song like many radio stations do right now (not internet based stations).
I want to see Pandora-specific devices that work anywhere. I want to have Pandora playing in my car, on my stereo at home, etc. and not require my iphone or computer. There are some right now for in home use, but nothing at a lower price range, like $50.
If I hear an advertisement on Pandora, I will immediately quit using the service.
Good. Useless pricks like you just use up bandwidth.
What David said.
Agreed! People need to eat too!
BestJobsOnline
http://tinyurl.com/7uj5ay
There are flat fees associated with them playing music, so if they can’t pay those somehow, they can’t keep running.
Many other companies use ads to pay for bandwidth, and many also charge to remove the ads and break even on licensing costs.
Look at Slacker. Cost the same as pandora to remove the ads.
http://www.slac.../radio/premium/
Nothing is completely free and quite honestly that is very pointless of you to say.
I doubt pandora will miss you
Have you ever listened to analog radio with all their ads? Or listened to public radio without donating?
I find a lot of value in Pandora, and accept the fact that they need money to pay their workers so we can continue to enjoy high quality personalized radio.
I hope the music labels start to appreciate the fact that Pandora could become one of their best sources of revenues, then maybe they could rely on “sales commissions” more than premium subscriptions or ads, but bottom line, they are a business and need $$$ to maintain this excellent service.
Yeah and I bet you’re the first guy that bitches about and blocks all forms of online advertising. Everything should be free right? Get lost pal.
Uh, hello, since when has it not cost Pandora money to stream tons of audio to thousands of listeners?
If this ad revenue helps pay for a fantastic service, and helps them pay for international licensing then I’m all for it.
I just want it to be available for Canadians : (
Is this referring to the Flash/audio ads?
Those have been there for months and I imagine most Pandora users have noticed them unless it was a targeted program. It sounds like the Twitter post just acknowledges them, rather than announcing anything new. It’s hard to tell based on this post.
Unless they have resumed the “This Pandora station is brought to you by…” voiceovers that they ran in 2007, which depending on their frequency could be more annoying.
Pandora still rocks, ad free or not.
good.
This is one of the many, many reasons to listen to Slacker radio instead. A ton more music, less repetition, more customization options and genre stations that are even better than Sirius/XM. I have to assume that those who haven’t dropped Pandora by now haven’t tried Slacker yet.
Pandora founder Tim Westergren confirmed the changes applied to the iPhone application, and said the 15-second audio ads should only appear about once every two hours. More details at dailygeek.pressdemocrat.com
I was going to create a website that streamed YouTube videos as music now I’m running into 2 problems, Number 1 is that YouTube is removing audio from videos with copyrighted music and number 2 I would supposedly have to pay royalties on streaming audio? I don’t get how this is kept track of or how much it costs. The whole idea of artist or ,more likely, their record companies, want to charge royalties one streaming audio. If anything, hearing a song on YouTube or Pandora will expose potential customers to the song and make them want to purchase it when they might of otherwise never have heard the song in the first place. It’s also interesting/cool to see pandora’s funding so high
Why would they want to pay for a song that they can listen to for free? Your logic is highly illogical.
Only people who spend all their time on the internet think that exposure is worth more than a few pennies.
Remember Snakes on a Plane? That movie got millions of hits of free exposure on the Web. The movie was also a colossal failure, and didn’t even make up its production budget in worldwide box office + dvd sales.
Exposure = not worth a damn thing
I don’t have a problem with it. I get an awesome service for free, listening to extremely short ads is the least I could do.
I just heard the same “Lie to me” ad twice inside of 10 minutes. Losing some serious social capital…
A dozen other ways I can get my song-fix for free, if they play that stupid ad one more time tonight I’m going on Pandora strike.
Honestly, I’m happy that they did this. I really appreciate the free services that I use online daily, and I totally respect their need to do things that will earn them money so that they can stick around.
Pandora still provides a better listening experience than any other internet radio provider, free or paid. I don’t think the ads will bother me at all. I’m just happy that this pretty much guarantees they’ll be around longer.
With that said, I haven’t heard the ads yet. I listen to Pandora in the mornings at work, so we’ll see if they’re annoying or not then. The terrestrial radio station I listen to (95.5 KLOS for Mark and Brian) plays ads just like any other terrestrial station, and I don’t find them to be very annoying, so I don’t imagine Pandora will be any different.
I much prefer http://www.slacker.com myself. It has personalized radio stations as well as professional stations with experienced DJ’s behind each station adding music to it.
Pandora does not need to apologize, it needs to make money somehow!
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The ads are very tasteful, minimal, and well done so far.
$36/year is way too cheap given more expensive alternatives. Pricing should be rising to $10-$15/month – what I used to pay to XM, because this is way more valuable.
BTW, I don’t care at all whether there are visual ads, even if I pay a subscription. Removing audio ads is the true value.
Until now, Pandora has been amassing audience without utilizing its single largest potential revenue source – that of audio messages embedded within the programming. Display ads on the website of an audio service are not an effective use of the medium. The fact that Pandora was not selling audio ads has been a sticking point for the record companies, who objected to their statements that they couldn’t survive with current royalty rates.
This move means that Pandora gets serious about developing a business model that includes audio. If they execute this with anywhere near the care they take with their product and programming I suspect it will be unobjectionable to most listeners, especially listeners who can understand that ultimately, Pandora is a business that has to make money.
I prefer my last.fm radio station anyways, but I hope this works for them, Pandora is a great service.
$36.00? I’d pay that fo’ sho’. Free would be ideal, but we have to be realistic here.
I wish there were a way to stream Pandora to my car. However, I won’t mind paying for the service. I’m surprised it took them so long to begin the ads.
does anyone know how long the ads are?
I would love to be able to pre-queue the Pandora stream on my iPhone, with or without advertising, so that I can listen at the gym where there is no wifi and no cell bars. I imagine that there is already a stream buffer to accommodate fleeting network outages during cell-to-cell changes and the like. How hard would it be to identify a station for pre-queuing, fill the queue through the day, then be able to play from it off-line?