E-Commerce Business

Running head: E-COMMERCE BUSINESS
E-Commerce Business
[Name of the Student]
[Name of the University]
[Author note]

1E-COMMERCE BUSINESS
1. Compare Pandora’s original business model with its current business model. What’s
the difference between “free” and “freemium” revenue models?
The original business model of Pandora consisted of providing a 10-hour access to
free service and then the customers were asked to pay a subscription fee of $36 dollar which
most of the customers refused to pay after listening t 10 hours of free music. This led to a
financial collapse in the year of 2015 which initially led to the creation of new business
model. The new business model was associated with providing 40 hours of free music which
was followed by providing the customers with three options (Hamari, Hanner & Koivisto,
2017). The options included the following:
a. Pay 99cent for rest of the month
b. Signup for becoming a premium member which would he helping in getting unlimited
usage
c. Do nothing.
The business model of pandora is based upon providing of some products or services
absolutely free of cost by depending upon certain percentage of customers who would be
paying for the premium versions (Chica & Rand, 2017). The free Revenue model which is
the future of the radical price has been associated with pointing out the fact that the marginal
cost of the digital products which are typically close to zero and is associated with providing
free products helping in reaching out to lot of customers.
2. What is the customer value proposition that Pandora offers?
Pandora was associated with paying a lot of attention to its premium services after
attracting a sufficient larger user base and for that they launched the Pandora One. Pandora
One is one of the high-end versions of the service which was not associated with offering any
kind of advertisement along with providing high-quality streaming music, desktop
application and lastly few usage limits (Huang, 2016). The premium service costed only $36