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Cool Device+Great Service = Happy Customer+Revenue

An amazingly simple concept – offer a GREAT service (for free) on a device that everyone wants, make it easy to bookmark their favorite tunes, and offer a path to purchase - people will not only be fans, but they will stray from ‘free’ long enough to pay for the tracks they really care about.  While Pandora doesn’t make much from the sale (the two commerce options, iTunes and Amazon, take home the bulk of the profit), it does provide them with an additional revenue steam outside of simply selling advertising through the site.  According to TechCrunch:

Users are buying about a million songs a month now from these affiliate links on Pandora….  Of those, a solid 20% are coming directly from Pandora’s iPhone app.

Pandora was smart to partner with Apple.  In return for adding value to the iPhone through it’s app (most downloaded app in 2008) – the company is gaining customers it might not otherwise have had.

I’ll reiterate the title of this post: Cool Device+Cool Service = Happy Customer+Revenue.  I’m a fan and a happy customer of both.  I’ll be streaming Pandora in my car as I head out on a roadtrip this weekend – maybe I’ll even buy a track or two along the way…

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