As Telstra prepares to launch its music streaming collaboration with Dr Dre in Australia, Pandora boss Jane Huxley has welcomed its entrance. Whereas Adam Good has dismissed ad-funded music models, Huxley told AdNews that global advertisers are piling in, with Mazda set to join the likes of Bupa and Sonos within days.
Beats, the subscription music service from legendary music producers Jimmy Iovine and Dr. Dre, launched in the US overnight. It emerged last August that Telstra had struck a deal to bring the service to Australia. While the telco won't be drawn on an exact launch date, it is understood Australia will be next cab off the rank.
While Australia now has a plethora of music streaming services in market, both ad-funded and subscription-based, Adam Good, director of digital media & content at Telstra told AdNews that the latter model would win out. Whereas content owners globally were struggling to create successful subscription models, Telstra had an advantage as "it has always had a paid model."
But Pandora boss Jane Huxley said that there was room for both models, and that advertisers here had attained click-through rates of up to 4% demonstrated receptiveness.
[Beats] is an interesting model. We're not competing with them for ad dollars and it is incredibly complementary to what we do."
She said the firm is now ready to fully monetise its user base, which has grown from 1 million on 1 December, to 1.3 million as of today. She's hired six new sales staff (from the likes of Mi9 and CumminsRoss) to ramp up growth.
While there was always a risk of annoying users with too many ads, she said monetisation was about the right sort of ad units. "I'm aware of the [commercial] balance required from my Fairfax days. [Users are receptive] if the ad load is minimal and targeted." The 'earballs' ad unit - audio followed by display - was the "star achiever" so far, she said. Nailing the ad units would start to see the gap between mobile penetration and mobile advertising narrow across the board, Huxley added.
Huxley's confidence in the model stems from being part of "a significant-sized mothership", with Pandora's hard yards in the US (where it has 200 million registered users) enabling the Australian unit to "stand on the shoulders of a giant".
Insurance, retail and automotive were likely to be the big advertisers in the near future, she said, and the automotive market was central to Pandora's growth strategy.
"By the year end we will be in 60% of all new vehicles shipping in Australia off the back of strategic partnerships signed with manufacturers." Pandora had just signed its 25th such partnership with Chrysler, Huxley added.
While the firm is stepping up its ad sales, Pandora won't be advertising above the line in the near future. "We'll never say never but it is not on our radar now. We've added 240,000 users in less than two months, so it's all about recommendations."
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