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Bridge Ratings Pandora Update - Consumer Use

 

For Immediate Release:

Wednesday April 25, 2012

What Pandora Won't Share

Bridge Ratings has been analyzing Internet Radio consumer behavior since the service began operations. In its latest update, Bridge Ratings asked Pandora users about their satisfaction with the service over time.

Perhaps the most revealing aspect of this new study is the impact of long-term use of Pandora.

The following chart is an overview of satisfaction from those who responded that they "liked the Pandora experience alot".

Over time satisfaction levels are decreasing among users 12-34 years of age and improving among adults 35+. Why is this?

According to personal interviews conducted during the study, young adults under 34 often explain frustration with expectations of the service. Over time, expectations delivered initially through Pandora brand marketing and word-of-mouth turned to disappointment for the following reasons:

  • Commercial clutter - even at 1-2 commercials an hour, expectations of the service were of a 'different experience' than traditional radio. Most users of Pandora initially sample the service to a) avoid commercial interruption and b) to have more control over the music they listen to.
  • Expectations of hearing a blend of music customized to their personal taste are very high initially among early adopters, but those expectations appear to dissipate over time due to an ineffective song choice methodology by Pandora. Satisfaction of the music mix - over time- becomes suspect and less than 'perfect for their tastes'.

When we asked the participants of the study to rate their experience with Pandora "Like it a Lot", "It's OK" or "Not Using it As Much as I used to," scores of "Not Using it As Much as I used to" are growing amoung young adults.

We then asked a subsample of 4339 Pandora Primes, or those who told us they were or had been heavy users of the service, about the number of times per day they use the service and for how long. In these cases duration usage affected satisfaction as well.

"Early Users", or those who had been using the service up to three months, showed high preference and satisfaction, multiple tune-ins per day for long listening spans.

"Yearling Users", or those who had been using the service for a little over a year, listened half as much as their "Early User" peers for half as many sessions.

By the time a user passes two years of use, sessions reduce to an average of 1 time per day for less than 20 minutes.

These numbers behind the huge volume of registered Pandora users show a facet of use not exposed previously. A heavy majority (79%) are passive users who enjoy the service but over time find their expectations diminished from their initial use.

This is a common consumer psychology; most products experience this type of satisfaction decrease over time because original high expectation experience is reduced by over exposure. The phrase "familiarity breeds contempt" may apply here as a majority of consumers often are less pleased with a product they've used for extended periods of time.

In the case of Pandora, since its introduction there have been new, different similar options which are exploiting some of Pandora's weaknesses.

With this in mind, the study found that while Pandora consumers who have been using the service a little as eight months begin seeking other sources for a similar experience, they will continue to use Pandora as their primary source for the customized Internet radio experience.

Advertising Awareness

In the second phase of this study, we examined advertising impact among both internet radio and broadcast radio consumers.

Perception of commercial advertising among broadcast radio listeners is both positive and pervasive. Radio has been free since its inception. Commercial advertising (except on public radio) has been part of the listening environment of broadcast radio and virtually all consumers of AM/FM radio have high awareness, recall and tolerance to the medium's commercial advertising.

For internet radio perception of commercial advertising is different.

Even as a maturing medium, consumers of internet radio have expected little or no commercial advertising. In some cases where paid subscription is involved, advertising exposure is eliminated. But our studies indicated that a small percentage, generally 10-20%, of internet radio listeners pay for subscriptions and that most listen to free internet broadcasts.

It is in this environment that Bridge Ratings examined the perception of commercial messages on both broadcast radio and internet radio to better understand consumer behavior as it applies to perception and response to advertising.

It is likely that broadcast radio's long-term exposure of commercial messages has created a somewhat comfortable environment for its listeners to be exposed to advertising resulting in the high level of advertising perception as shown in the chart below.

However, among internet radio listeners - in this case those who use Pandora for at least an hour a day - perception of commercial advertising messages is low compared to broadcast radio. And perception of commercial messages on Pandora deteriorates over time - the longer a consumer has used Pandora, the less aware they are of the commercial messaging.

These low perception scores may be linked to the presentation as well as both the length and hourly quantity of commercial messages that were evident during the time this study was fielded in the first quarter of 2012.

Nonetheless, as an environment that positively supports commercial messaging, broadcast radio has high scores for awareness of advertising. Recall of advertising messages is also higher for broadcast radio over internet radio in general and pertinent to this study, Pandora specifically.

For additional information contact Dave Van Dyke at 323.696.0967.

Study Methodolgy

Survey dates: January 3, 2012 – Apr 6, 20012

Release date: 4/25/12

Samples:

(1)4339 Pandora Primes age 12+, Margin of Error: +/- 1.5%, In-tab
(2)32,004 persons 12-54 who have used Pandora 1+ years, Margin of Error: +/- 1.3%, In-tab

“Primes” are defined as ‘heavy users’; those individuals who spend at least an hour a day with a given audio application or source.

Bridge Ratings surveyed 4339 Pandora Primes and 4400 broadcast radio primes ages 12+ for SURVEY PARTITION A and 32,004 persons ages 12-54 for SURVEY PARTITION B. SURVEYS associated with PARTITION B took place over a period of five years. All surveys used a three-tier methodology. Tier I was a telephone interview, Tier II was a self-administered internet-based questionnaire. Tier III were in-person, one-on-one interviews. Surveys for PARTITION B were conducted over a three-month field period. Respondents were chosen on a random basis through a random digit-dialing telephone process and mall intercepts which produced a sample of respondents who preferred an internet-based questionnaire.


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