Pandora Shares Plummet on Sour Fourth-Quarter Forecast
Pandora Shares Plummet on Sour Fourth-Quarter Forecast
The New Look: A screen grab from the newly redesigned Pandora site.

Pandora came roaring out of the gate today with a fairly substantial overhaul of its website, as well as a change in how many hours of music users can stream for free.

Previously, there's been a cap on the number of hours Pandora users could stream in a month. Once you reached 40 hours in a given month, Pandora would charge $1 to keep playing for the rest of that month, or offer the chance to upgrade to a subscription. No more.

Pandora has removed that cap, and instead added an "abuse prevention" limit of 320 hours a month. If that pretty high bar is still met by any users, Pandora will contact the account holder and notify them. (It's possible for instance that a user could start playing Pandora on a computer, leave the room, and simply forget about it for days).

As for the site itself, Pandora's changes are structured for greater social interaction and sharing among users, perhaps in anticipation of the new media hub expected to be announced by Facebook tomorrow. Built on HTML5 (ditching Flash), the new site features a "share" button next to the personalized stations users create. It also gives each station its own dedicated URL so that can be easily shared via Twitter, Facebook, email and other methods.

Other changes include:

• Faster load time

• Simplified station creation, using an enhanced auto-complete option and using personalized suggestions

• Enhanced listener profiles and a new music feed

• New controls, including new placement of player control buttons like play, pause, thumbs up/down, and a new shuffle

• Enhanced artist information

Other new features are geared more to please advertisers. They include integrating ads across various elements of both the website and the mobile app, larger video ads including full-screen overlays, and so on.

The changes have been in the works for more than a year, according to the company, but come at a particularly good time. Not just because of the changes expected from Facebook tomorrow, but because of the new competition coming its way from Clear Channel, which this month unveiled its own personalized radio service.

In other Pandora news, videogame and entertainment analysts Michael Pachter of Wedbush Securities initiated coverage of the newly public Pandora with an Outperform rating and a 12-month price target of $14, a notable shift from the largely negative ratings issued by analysts to date.

"Pandora's rapid user growth rate easily outpaces those of its terrestrial and satellite radio peers," he wrote in a research note announcing the move. "We believe that solid revenue growth, combined with effective cost control, will lead to a profitable year by FY:13."