I think we are all on the same page, that Pandora needs to make a change to increase revenue or else it will only be a matter of time until Pandora closes up shop. Going forward they have a few very feasible, very possible options, but I believe there is one that makes the most sense.
The option that makes the most sense is moving to a freemium business model. What this means is that you have a basic version that is accessible for free to everyone and an upgraded version that is available for super users at a cost. You still have the availability for advertising revenue on the free version while keeping it unobtrusive for the user.
This article http://techcrunch.com/2011/09/04/complete-guide-freemium/ talks about pricing strategy using the freemium model. You can incorporate another option mentioned by allowing it to be free to a point, but after, say 40 hours you are capped out at the free version. So the user can either wait until they are reset at zero in the following time period or they have to pay for unlimited listening ability.
Another option that the consultants brought up is the store model similar to iTunes. If you like what you hear, buy it with Pandora. I think this is a great option and one I hadn't thought of prior to the presentation. However, I am concerned about the investment and time that it would take to launch this process and get customers to convert from iTunes or Amazon to the Pandora Store. This may become a more viable option down the road, once we have a strong revenue stream from the freemium method and advertising.
My recommendation would be to explore the freemium option with the support of advertising in the current time frame. This requires little to no additional investment and could be implemented very quick. Down the road once they are more stable, I think it would be smart to revisit the idea of an iTunes type store to purchase music.
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