Pandora Extends On-Demand Listening to 'Freemium' Listeners With Video Ads

Courtesy of Pandora
     

When ad-supported users search for music, they will now have an option to view a commercial to unlock a premium listening session.

Pandora announced Thursday (Dec. 14) it now offers an on-demand listening option to its ad-supported listeners, if they opt in to watch a 15-second video ad first. 

When "freemium" users search for a song, album or playlist now, or have one recommended to them by Pandora, they will now have an option to view a commercial to unlock the Pandora Premium listening session. 

The Pandora Premium subscription service was launched late last year, combining the app's personalized radio function with the ability to search and play for songs and albums with additional customized playlists. Now it is giving its ad-supported users access to those offerings as well, promising to bolster ad revenue in the process.  

"Our ad-supported listeners' top request has consistently been the ability to directly play the specific songs, albums, or playlists they want," said Roger Lynch, Pandora's president & CEO, in a statement. "These new features address that need by marrying rewards-based advertising with the best-in-class on-demand experience we've created with Pandora Premium. This unrivaled experience will drive listeners to Pandora and drive awareness for Premium, while also creating new opportunities for artists, labels, publishers and advertisers."

With this new option, the streaming service is appealing to its wider user base with what looks like an act aimed at retention as well as conversion to paid subscriptions, directing listeners to a Premium trial offer after the on-demand music has ended. In Q3 2017, Pandora's active user base declined by 6 percent year-over-year to 73.7 million active users, versus 77.9 million in Q3 2016. Meanwhile, total subscription revenue across Pandora Plus and Pandora Premium swelled by 51 percent to $84.4 million over that same amount of time, while total paid subscribers increased 29 percent YOY to 5.19 million.

"Pandora continues to deliver product enhancements that create the ultimate music streaming destination for listeners, giving them more of what they want, when they want it," added Chris Phillips, Pandora's chief product officer. "The ability for our ad-supported users to search and play songs in our Premium product is game-changing not only for listeners, but also for artists and advertisers. For artists, it creates new avenues of promotion by providing fans with direct links to play their music. For advertisers, it offers new ways for brands to build trust and create value for their audience." 

See how the process works below, starting with a Pandora track recommendation, followed by the 15-second video ad and song streaming.