But the tide appears to be turning. Not only is Pandora's stock up and the news flow relatively positive, more stories reflect a seemingly new-found comprehension of Pandora's competitive advantages and the true meaning of Apple's
Consider this verbal specimen from Gigaom. In "This is why Apple wants to launch iRadio," Janko Roettgers characterizes Apple's plans as "not about Pandora, and all about Spotify," noting that,
...iRadio won't offer on-demand streaming of complete albums like users have come to expect from full-blown music subscription services like Spotify . . . That's because the Spotify model directly competes with Apple's music download business. Pandora, on the other hand, actually helps Apple sell more music.
. . .That's why it's smart for Apple to invest in iRadio. The goal is not to kill Pandora, but to actually bring that type of radio service to more users, and keep them from switching to a full-blown access model.
Excellent and probably very accurate take.
Even Apple cannot overcome Pandora's enormous first-mover advantage with respect to Internet radio market share and construction of the sales apparatus necessary to capture advertising dollars from traditional radio. Plus, Apple simply will not be able to do personalization and discovery -- two key components that set Pandora apart from its competition -- to the level necessary to match the quality of Pandora's offering as push-a-button and listen wherever you are radio.
To that end, Bloomberg comes through big time with an excellent video that explains some of the Music Genome Project's ins and outs. That's the complex system Pandora uses to put together each listener's personalized radio station.
Pandora's quarterly report comes in May. At least one firm, Pacific Crest, expects strong results and upside guidance. I'm not a short-term guy, particularly on this stock, however, the most recent quarter turned a few people around. Another solid earnings release could send Pandora to the high-teens sooner than even I expect.
--Written by Rocco Pendola in Santa Monica, Calif.
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