I was getting really sick of hearing audio ads on Pandora. In addition, the company is dramatically expanding its iPad ads program:
The music service is now offering display ads on the iPad to sponsors, in addition to its banner and audio ads, and now has three big takers in Starbucks, Lexus and Budweiser. When clicked, their ads open up a new page but don’t interrupt the music. While all three marketers advertise with Pandora on other platforms, the iPad offers a richer media experience, and the company is hoping it can improve on an already-high 3.4% click-through rate.
Pandora now has more than 30 million users on mobile devices — and 50 million across all media — and the company is hoping to accelerate usage by way of the iPad. Pandora founder Tim Westergren noted that the company is signing up about 100,000 new mobile users each day. “It’s just exploding for us,” he said. “And on mobile devices, the advertising — particularly advertising with video — has been really effective.”
While the iPad ads purport to be non-intrusive my growing displeasure over the audio ads was compelling me to do one of two things: abandon Pandora entirely or become a subscriber for an ad-free version at $36 per year. I decided to do the latter because I’ve come to use Pandora on so many devices.
I understand that Pandora has to make money to make a living and pay music royalties. I didn’t mind the display ads because they were non-intrusive and I could ignore them (Pandora claims a nearly 3.5% CTR). But after having gotten used to the service without audio advertising, to hear ads for travel or the Discover card on my headphones was so jarring that it actually made me angry.
Pandora was on the brink of extinction over royalties but has come roaring back as a direct beneficiary of the iPhone and, later, other smartphone platforms. Mobile is what transformed the business.
Now Pandora directly threatens the existence of satellite radio, which may find enterprise usage but will have difficulty further penetrating the consumer market.
My own behavior in this case does suggest the viability of a two-tiered model for content services. But I qualify that statement with the following: If Pandora had not gone into mobile and had remained an Internet-only service I probably would not have subscribed as I did.
Screenwerk 
June 17, 2010 at 7:31 pm
I too…am about to be forced to subscribe for the very same reasons you spoke about. I appreciate that they used to provide a great music pool for free and that only due to royalties and other legal issues were forced to charge for extensions and the Pandora 1 Service. Still…a very reasonable amount to pay for the service that they provide. I wonder how much the Satellite Radio companies have declined in revenues since the advent of Pandora becoming so popular?
June 17, 2010 at 7:55 pm
I think satellite has probably taken a consumer hit. There’s still enterprise appeal but Pandora and its kin will definitely have capped its consumer growth potential.
June 26, 2010 at 8:15 pm
Yeah, they are getting too greedy. The advertising is getting out of hand. I thought of just subscribing, but I think that’s why they’ve stepped up the advertising so much…to basically push us to subscribe. So, I’m going to look at other music sources. Plus, now when I tell people about Pandora, I’m definitely going to follow it up with “but the only problem, and it’s a big one, is that there’s just too much advertising.” Unfortunately, I’m really starting to hate Pandora. I wanted to tell them all of this, however, I’m having a hard time finding any feedback links on their site.
July 2, 2010 at 4:40 pm
I keep running into the problem of using up all my 40 hours of free time… but really $36/year isn’t so bad…. it solves the advertising issue (since it’s an ad-free paid service) – I’m all for it. They provide me a great listening experience, and keeps me going while I’m at work! Go Pandora!
August 9, 2010 at 7:37 pm
I’ve seen a huge increase in ads this summer and hear ads almost everytime I turn it on and up to 5 an hour. My brother says he doesn’t have any because as a long time user of pandora, he’s grandfathered in to an ads free account.
I’m done with Pandora and will try Last FM or other free music sights that have less advertising.
August 11, 2010 at 7:24 pm
I have both Pandora and Sirius however I am listening more and more to Pandora, thinking of dropping Sirius all together. Pandora also is on my blue ray and Wii player making it easier to access stations when my cell phone is missing (behind couch cushions). $36 a year is nothing as long as access where ever continues. Sirius charges still by device making it cost prohibiting.
January 9, 2011 at 7:46 am
I have had Pandora now for over two years and I love it. The new edition for Pandora to the iPhone is what really took me over the edge. When I’m in my car, when I’m at the office, when I’m at home, Pandora’s with me. I would have to totally agree why would anyone spend 36 bucks a year for satellite radio when you can simply get Pandora for free, and only have to listen to a small little clip advertisement every hour or so.
Great post, cheers
March 19, 2011 at 12:33 pm
You are right! They are getting very greedy indeed.
I’m really starting to hate Pandora, I am sick of seeing their adverts!
November 13, 2011 at 4:24 pm
I am a long-time user of Pandora. Don’t know how I missed being grandfathered into their free version for life. Been listening to it for 2+ years now on my iPhone & note a recent uptick in the number of ads. It’s annoying to say the very least. Considering a subscription but don’t know if I listen enough to warrant it (about 4 to 5 hours per week).
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March 7, 2012 at 4:44 pm
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April 4, 2012 at 5:50 am
Pandora does not stay within music genes which is continually bluring individuals original selected musical taist. After listening to the station of your choice you will gradually, but subliminally via Pandoras “smart personalization softwear, start to feel the station is looking for your reaction to new music introduced at the right moments in your session. You will be in fact: “habitually personalizing” which is not listening at all. I wonder how many times I have to tell Pandora what I would like to here after Ive already selected my station. Pandora Radio will not be in favor with its users much longer do to over crowded opinions of users influencing Pandoras software development. You can’t be a user and a developer at the same time, nor can you be a boss and employee simultaneously. When the heard moves on they’ll say it’s because they didn’t listen to the people when in fact Pandora was not created by the people, but by innovative engineers who opened up there ears to users do to normal business groth practices of todays overgrown infants of money.
July 20, 2012 at 7:17 am
Read about it that no one seemed like Pandora. Pandora will not be like this then
January 29, 2013 at 11:16 pm
I use Pandora all the time too and didn’t realize that the yearly subscription was so low. The ads that appear on the screen get annoying when I want to see what the name of the song is and who the artist is. I got to close the ad on my phone and the collapse button is so small that I sometimes inadvertently open the ad. After reading this article, I may actually consider subscribing for the no ad version as well.