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iPhone Brings Bounty to Pandora


Mobile makes good
for impulse e-commerce

Online streaming radio services, such as Last.fm and We7, have been hard-pressed to find a profit model that enables them to pass money to artists and record labels while remaining solvent themselves. But Pandora, a company that's profited primarily from advertising deals on its site, has found a new cash cow: the iPhone.

According to CTO Tom Conrad (via TechCrunch), users now buy about a million songs a month from affiliate links to iTunes or Amazon's MP3 business. But of these, a full 20% come directly from Pandora's iPhone app, which features links to affiliates like iTunes and Amazon, and enables users to download new tracks directly onto their handhelds.

Another growth-driver is bulk music purchasing, which enables users to bookmark Pandora tracks and buy them en masse via iTunes or Amazon. Conrad says 10% of web users that buy music via Pandora now make use of this feature.

One million tracks sold a month totals about $12 million in sales per year, with Pandora comprising less than 1% of all radio (including terrestrial and satellite). And while it's unlikely Pandora will ever dominate the radio category, Conrad points out that, based on company research, every user that buys a song is likely to buy three to five more songs in addition to the first one.

And even before the iPhone app was developed, Pandora was labeled one of the top affiliate purchase drivers for both Amazon and iTunes — with main competitors hailing from the online shopping search engine category (such as shopping.com), rather than from other streaming radio sites, oddly enough.

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