Attention, streaming audio consumers: There’s another hoop to jump through to hear your favorite music on Pandora.
And, it involves a video advertisement.
That may be an added and unwanted obstacle for consumers. But, it’s an important addition for the Oakland, Calif.-based company in its quest to increase profits and stem its royalty payment-fueled losses.
As of Dec. 14, ad-supported and Pandora Plus listeners now have access to on-demand listening experiences — after viewing a 15-second video ad.
When listeners search for a specific song, album or playlist, or have one recommended to them by Pandora, they’ll have the option to view the ad in order to unlock a Pandora Premium listening session.
That’s the subscriber tier from Pandora available for $9.99 per month that delivers on-demand listening in much the same manner as rival Spotify.
While the ad brings in revenue for Pandora, the additional benefit to the company is, potentially, new subscription dollars.
In a note to users, Pandora explained the presence of the new :15 video ad by saying, “This exciting release helps us deliver on our core strategy to grow and more deeply engage with our listener base by adding more competitive and interactive features to our free and Plus tiers. We know there is power in marrying reward-based advertising with our Premium features, plus this latest product innovation creates new opportunities for our music and brand partners. 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.”
Pandora President/CEO Roger Lynch said, “Our ad-supported listeners’ top request has consistently been the ability to directly play the specific songs, albums, or playlists they want. These new features address that need by marrying rewards-based advertising with the on-demand experience we’ve created with Pandora Premium. This will drive listeners to Pandora and drive awareness for Premium.”
Pandora feels strongly that “mobile rewarded videos” will prove successful with its users — in particular teens aged 16-19, who it says are three times as likely to prefer such videos.
Further, Pandora says, “Value exchange ad products on Pandora, such as Sponsored Listening, have been consistently effective brand lift drivers for our partners.”
In one study with an unnamed Quick Service Restaurant brand, sponsored listening drove a 69% lift in store visits among adults 18-24.
“We’re now seeing indicators of similar behavior during early testing for our new feature, indicating that 18-24 year olds are 13% more likely to unlock access to Pandora Premium by viewing a video ad,” Pandora says.
With sponsored listening, listeners are offered either one hour or four hours of uninterrupted music, in exchange for what Pandora says is active attention and engagement with a brand.
It mirrors the Spotify platform, which uses similar techniques for brands to engage with consumers via its mobile app, but not via desktop access.
