Pandora Starts Testing Advertiser-Promoted Stations

Popular Internet radio service Pandora on Wednesday began dabbling with boosting revenue by letting advertisers "promote" stations listeners might like.

"Promoted Stations" are being woven into suggested listening options for about 10 percent of Pandora's approximately 76 million monthly users, according to the Oakland, California-based streaming radio star.

"We are relentlessly focused on advertising solutions that enhance both the listener and advertiser experiences," Pandora Media vice president of digital advertising Lizzie Widhelm said in a release.

Promoted Stations entice listeners with digital content put together in collaboration with advertisers who then have opportunities to woo Pandora users with brands or messages, according to Widhelm.

Advertisers taking part in the test phase include Toyota, Kleenex, Skechers, StubHub and Taco Bell.

Pandora has won fans of its service for streaming music to Internet-linked devices and is working on boosting revenue to cover song royalties and other costs.

A US judge in March handed Pandora a partial victory in a royalties dispute with music publishers and songwriters.

The decision, closely watched for its impact on the fast-growing online radio industry, keeps intact the royalty rate paid by Pandora, the largest US Internet radio firm.

US District Judge Denise Cote set a five-year royalty rate owed by Pandora to the American Society of Composers, Authors and Publishers (ASCAP) for licensing music at 1.85 percent, the same level as currently exists.

ASCAP had sought a gradual increase, while Pandora had argued the royalties should be dropped.

Cote's ruling suggested a hesitancy to wade too deeply into rate-setting in a fast-changing industry.