Sentiment swinging in Pandora's favor
Even with Apple set to enter Internet radio fray, Wall Street is beginning to recognize that Pandora enjoys first-mover advantages that make it tough to dislodge.
By and large, most tech and music websites get the Pandora Media (P) story horribly wrong.
But the tide appears to be turning.
Not only is Pandora's stock up but the news flow is relatively positive, as more stories reflect a seemingly new-found comprehension of Pandora's competitive advantages, and of the true meaning of Apple's (AAPL) all-but-certain entry into Internet radio.
Consider this verbal specimen from Gigaom, in a post headlined, "This is why Apple wants to launch iRadio," which notes that Apple's aspirations are "not about Pandora and all about Spotify," The writer continues:
...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 a very accurate take.
Even Apple cannot overcome Pandora's enormous first-mover advantage in the market for Internet radio. In addition, the Cupertino, Calif., company is far behind Pandora in the developing 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 -- at 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 Wall Street firm, Pacific Crest, expects Pandora to post strong financial results for its most-recent quarter and to provide upside guidance. I'm not a short-term guy, particularly on this stock. However, Pandora's last quarterly report turned a few people around, and another solid earnings release could send Pandora to the high-teens sooner than even I expect.
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The fallacy of first, a broken and burned out MBA philosophy. “First’s” go in Museum’s, “Best” make billions and build Nations. Be the “Best” and not necessarily the “First”.
If first were as paramount as many experts espouse then;
GM’s EV1 (do you remember?) would be the favored electric vehicle and not the Toyota Prius (Best). Toyota figured out from GM’s “need to be first mistake” that a hybrid was the best EV consumer solution.
Netscape (ahhh to be first) but now Google (best for now).
Motorola cell phones (now appearing in tech Museums), they invented the category, now Apple iphones rule (again, best for now).
Kitty Hawk (How many of you fly on a Wright Brothers plane?) vs. Seattle (Boeing is best- but slipping)
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