By Robert Siegel, Julie Makinen
2017 | Case No. SM281 | Length 19 pgs.

The offices of Pandora Media were thick with excitement and anxiety in March 2017.  The company had just launched its new streaming music subscription service, Pandora Premium.  The product was a major departure for Pandora, which since 2005 had built its brand and its business primarily on being an ad-supported, free Internet radio service.  Now, it was offering music fans ultimate “on demand” control—play any track, at any time, for $9.99 per month.  The company’s senior leadership believed the new product would help Pandora better compete with formidable challengers like Spotify and Apple Music, whose on-demand music streaming services were attracting millions of paid users, particularly the young consumers so coveted by advertisers. The development of Pandora Premium was a massive effort across the entire company, requiring new contracts with music rights-holders and the integration of a new team of designers and product managers after Pandora’s acquisition of rival streaming service Rdio. Product managers were on the front line of the process, which required complex decision-making around user features, target customers, marketing strategies and how to balance the need to continue generating ad revenue while developing an ad-free, subscription product.

Learning Objective

Case examines how a strategic decision like the development of a subscription product is executed at the product manager level. How does a company like Pandora Media make product decisions? What tools does it use to guide product decisions and development? How do teams interact to set priorities and resolve conflicts? What is the decision-making process and how do teams work together?
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