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Imperfect Pandora: Why the Music Service Needs a New Strategy

2011 is turning out to be a roller coaster of a year for the Pandora Radio, the popular online music recommendation service. Back in April, a thorough security analysis by Veracode revealed that Pandora’s mobile apps transmit personal information to advertisers, including birth date, gender, and GPS information. This steep tumble was met with a gracious climb only two months later. Earlier this month the music service filed for it’s initial public offering, starting out very strong with an outstanding $3 billion dollar valuation. By the numbers, you’d have to assume Pandora is and excellent service, providing music services of the finest quality. You’d be wrong.

Pandora and its Ads

Pandora is weak. As and internet radio service it succeeds at playing recommended tracks according to positive and negative input by its users, but it fails at nearly everything else. Pandora competitors have been popping up by the dozen, and many of them outdo Pandora with large mp3 collections and impressive features. So if there are other, better music services on the web, why is Pandora a $3 billion dollar powerhouse?

The answer requires a bit of a web history lesson. Back in 2005 when Pandora first began its service there was nothing else like it. User controlled radio was an all new concept that caught on instantly. It didn’t take long for Pandora to add advertisements into the mix to create a revenue stream. All that free music has to be paid for somehow. Things got shaky in 2008 when increased webcasting costs threw Pandora into a state of near-bankruptcy, but thanks to the smartphone revolution brought about by the iPhone, Pandora managed to pull itself up by its bootstraps, utilizing heavy advertising in its mobile applications.

So Pandora is the grandaddy of music recommendation services, and one of the most popular, so it must be the best right? Wrong again. Pandora’s steady rise caught the attention of a mob of companies looking to provide similar services. Older contenders like Last.fm and new players like Slacker place themselves directly in competition with Pandora, offering enhanced versions of the same recommendation service. They attempt to be Pandora “done right” and many of them succeed in this mission. Before you learn about what’s better than Pandora it’s important to know what makes Pandora not good enough. One glaring problem is the service’s lack of content. Though it’s been around for years, the Pandora library consists of only about 800,000 songs. That may be far more than you have in your iTunes, but it’s a small number in comparison to Pandora’s competitors. Slacker has 3 million songs. Grooveshark has nearly 9 million. More songs means less chances of hearing the same thing twice, something that happens often on niche Pandora stations. Problem number two for Pandora is far more disconcerting than their minuscule library. As mentioned before, Pandora has been a bit too friendly with advertisers, generously sharing private information about customers without their consent. News of Pandora’s questionable practices came as a shock for a lot of people, but after a few uses of Pandora’s iPhone and Android apps it’s hard to be surprised. The mobile apps are soaked in advertisements. Upon opening the app you are welcomed with an ad. After a few seconds it disappears, revealing album art of the music you’re listening to and a set of music controls, but don’t think it’ll stay that way forever. Two seconds into your favorite track another advertisement pops up. Apparently Living Social wants you to click on the big cupcake and sign up for their deals service, and they think covering three quarters of your screen with a picture of a cupcake is the best way to get you to do it. If your fingers are nimble enough to tap the miniature “x” at the top right of the ad you can close it and enjoy being able to see the album art for Lady Gaga’s Born This Way in its entirety. But don’t get your hopes up. As soon as this track is over an audio advertisement begins. The track after that will be succeeded by a 30 second spot for Old Spice. The level of advertising within the Pandora app is excessive and appalling, and though competitors advertise in their apps, most of them don’t go to such great lengths.

Slacker's Fine Tuning

So if not Pandora, then what else? For starters there’s Slacker Radio. Of all the Pandora wannabes, Slacker is the most similar to the originator. Since 2007 Slacker has been offering a music recommendation service with more tweaks and more perks than Pandora’s basic thumbs-up-or-down system. Slacker’s killer feature is the ability to fine tune stations. You can set A Tribe Called Quest Radio to only play tracks from their early years. You can set Daft Punk Radio to only play fringe artists, giving you a chance to hear something you never knew you liked so much. All of this is powered by a 3 million song library spanning hundreds of genres.

Grooveshark adds flavor to the mix with it’s unique library system. Users have the ability to listen to recommended tracks or they can upload their own library. Premium users have the ability to create and share playlists using their music as well as over 9 million songs uploaded by other users.

Because of it’s age and it’s popularity, Pandora holds a very strong position in the music streaming industry, but without better features and something to clog up that user information leak, it will be difficult for the company to stay at the top.

Ben Badio is a jack-of-all-trades. A recent graduate from the University of Central Florida, Ben has a healthy obsession with technology, a grand knowledge of music, and a passion for writing. You can read more about him here and contact him at benbadio@gmail.com.

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Unlimited, Has Its Limits

Phenomenal phones are flooding the market. In the past few weeks the new iPhone 4, the HTC 4G EVO, Droid X and HTC HD2 debuted, all phones with fast processors and big screens.

But these new phones come at a cost – a recurring monthly charge. So before you sign a contract for two years of payments, which phone is really the bargain?

Before I get too far, let me acknowledge that the value of a phone is in the eye of the beholder. The least expensive isn’t a value if it doesn’t have the features you want.

That said, all of these phones are high-powered computing devices, each with features to recommend. But let’s take a look at pure costs, compiled with the help of cost calculator Validas.

Pricing of the HTC EVO ($200 with a contract after rebates) which works on Sprint’s high speed 4G network, has raised some hackles. The reason is the phone requires a $10 premium data plan, whether you are in a 4G city or not. And chances are that you aren’t – there are 33 4G cities, and they are modest markets like my home town, Baltimore. You won’t find 4G in New York or San Francisco.

The premium brings the monthly price for unlimited service to $110. That is, unless you want to add hotspot service, which lets you connect your computer to the Internet through your phone. That costs an additional $30 a month.

But that isn’t the most expensive plan. You’ll pay more for an iPhone 4 ($200 for the 16GB memory, $300 with the 32GB memory, with contract) unlimited plan at AT&T. The iPhone’s unlimited plan will run you $115 a month. But don’t forget that the AT&T unlimited plan is no longer unlimited. New customers are capped at 2GB of data a month, with a $10 per gigabyte charge when you go over the limit. By AT&T’s count only 2 percent of its users exceed 2 gigabytes a month.

Still, it is not the most expensive plan. That honor goes to Verizon, whose unlimited plan for a phone like the Droid X ($200 with contract after rebate) is $120 a month. Like the HTC EVO, the Droid X has a hotspot feature that lets you use it as a router to connect a computer to the Internet. Add that service and it’s an additional $20 a month. That brings it to parity with the Sprint’s EVO.

So if you aren’t going to use the hotspot, the EVO costs less per month than the Droid X. If you are going to use the hotspot, they are equal.

That brings us to the least expensive unlimited plan, which is T-Mobile’s, at $95 a month. T-Mobile’s HTC HD2 ($100 with contract after a Web-only discount), with a 4.3-inch screen, was the largest display available on a phone when it was released a few months back. It is on the Windows Mobile operating system, which I found quirky, glitchy, and confounding to use. You might splurge for the MyTouch slider ($180 with contract), an Android phone with a slide-out keyboard, a button dedicated to activating voice commands, and a set-up assistant that makes it easy to get the phone configured.

To any carrier’s monthly bill you also have to add an average $9 in taxes and surcharges, a total of $216 over the life of a standard two-year contract.

In the end, the HTC HD2, the most economical choice, would cost about  $2,600 while the Droid  X costs about $3,290 over a two-year contract, a savings of nearly $700.

That is how the pricing shakes out with the unlimited plans, but the best way to save money is to buy the minimum number of minutes you need, so you aren’t throwing away money on voice, data and text that you don’t use.

According to Validas, a 450-minute plan with unlimited text and data is plenty for most single users and saves $20 to $30 per month. For families with two lines, the company said average use is about 735 minutes, so a 900-minute plans would be ample and save you $10 to $20 per month.

You can check your past bills to find your actual usage, or use an online service like Validas or BillShrinkwhich take your bills and calculate the best deal for you.

-Mr.CEO (via yahoo)