Pandora Case Analysis

623 Words Jul 10th, 2014 3 Pages
David Raphael S. Pe
ECOMMER K31

Pandora Case Study

1. Compare Pandora's original business model with its current business model. What's the difference between "free" and "freemium" revenue models?

Pandora originally started with a subcription type of business model wherein users must pay $36 per month after they have used up their 10 hours of free access. The original model used was the free trial type. What happened was after the free trial of 10 hours was used up, the customers were unwilling to pay for the subscription fee. Now, the new and current model being used by Pandora is the freemium business model. The new model offered users longer time limit in using their features, which could be used again in the next month and
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3. Why did MailChimp ultimately succeed with a freemium model but Ning did not?

MailChimp succeeded with its freemium model because it started with offering free basic tools for the users and gave them the option to upgrade their account for a subscription fee in order to access the special features that MailChimp provides. As the user’s email list grew, people now are more likely to subscribe to MailChimp in order to access the special features which offered the ability to send more emails to more people and the ability to use the feature that provides sophisticated analytics to help the users to target their market more efficiently and effectively.

Ning did not succeed with the freemium model because a number of the users did not need the special features offered by the company. Ning is a company that enables its users to create their own social networks. The problem is that not everyone needs to start their own social networking sites.

4. What's the most important consideration when considering a freemium revenue model?

The large potential audience is the most important consideration when considering a freemium revenue model. In order for a business to grow, it should attract as many people as possible. These users will later on be the ones that will pay for the services the business offers. In order to attract customers, the service that the business

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