Seeking Alpha

Pandora investors take profits, initial iTunes Radio reviews decent

  • After rising 6.6% yesterday to new highs, Pandora (P -3%) is giving back some of its gains today.
  • This morning, the Web/mobile radio leader announced underwriters have fully exercised the 2.73M-share overallotment option provided with the company's 18.2M-share stock offering (priced yesterday). That means the offering now stands to yield gross proceeds of $393M, and increase Pandora's diluted share count by 9%.
  • Initial takes on iTunes Radio (AAPL - became available on Wednesday, as part of iOS 7) have mostly been positive. Users like the service's music algorithms, History and Wish List features, and station-customizing tools, as well as a Featured Stations option that CNET (4.5/5 stars) thinks "[blends] the personal touch of a curated list with the scale and smarts of an underlying algorithm."
  • CNET also praises the larger size of iTunes Radio's library (27M tracks to Pandora's 1M), ability to leverage iTunes playback/purchase data, and "minimally intrusive ads." Billboard (2.5/4), however, is critical of iTunes Radio's Siri integration (unable to handle some basic commands) and the reliability of its syncing features.
  • Still working in Pandora's favor: the time invested by its 72M+ active users in creating custom stations, and the ability to support users looking to listen on both iOS and Android hardware.
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Comments (42)
  • bgold1955
    , contributor
    Comments (2068) | Send Message
     
    Was a frequent user of P and changed artist multiple times within a 2 hour period due to not liking the mix. Have used iTunes Radio the last 2 nights and did not change from initial artist selection due to appealing mix. Fewer commercials and the one on iTunes were higher paying type commercials (Macys) rather than a local dating service that frequented P commercials. I am very impressed.
    20 Sep 2013, 02:33 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Macy's advertises with P as well.

     

    http://bit.ly/18gkirC

     

    "Tony Giannini, senior VP-media strategy and marketing effectiveness at Macy's, said he will continue buying ads on Pandora despite Macy's being an iTunes Radio launch partner."
    20 Sep 2013, 03:45 PM Reply Like
  • berniespear
    , contributor
    Comments (234) | Send Message
     
    P is done sadly. Give it time and why would you still use P when iRadio is just as good or way better. And easier.
    20 Sep 2013, 02:52 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Because for many, it is neither! And let's not forget all the Android, Xbox, Roku, Windows phone, etc, not to mention their car integration: Acura, BMW, Buick, Cadillac, Chevrolet, Ford, GMC, Honda, Hyundai, Lexus, Lincoln, Mazda, Mercedes-Benz, MINI, Nissan, Scion, Suzuki and Toyota http://bit.ly/16lAKE6 in-dash, listeners!

     

    With iCloud issues, I'm having trouble getting my iTunes Radio stations created on my iMac to play on my iPhone!
    20 Sep 2013, 03:52 PM Reply Like
  • bgold1955
    , contributor
    Comments (2068) | Send Message
     
    I agree, P certainly has a future based on my best guess at this time. I enjoyed it for 4 years, it was great. Think iTunes Radio will be in some of the autos you mentioned. I say, let there be choices.
    20 Sep 2013, 04:32 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    "Think iTunes Radio will be in some of the autos you mentioned."

     

    I've been wanting Apple to make a car radio ever since my first ipod! Apple does have an "iOS in the car" development, but from what I've read (and I'll admit I'm still getting up to speed here) is that it will be more of a high-end/luxury option, whereas Pandora is going more mainstream/volume (following SiriusXM lead). The very much untapped (except by SiriusXM) car market is going to be a large opportunity for the streamer that gets it right. (Btw, GOOG and MSFT are after the car dash as well)
    21 Sep 2013, 12:31 AM Reply Like
  • lh2soda
    , contributor
    Comments (55) | Send Message
     
    first thing i did after installing iOS 7 was to delete Pandora. Why would i use Pandora when I have integrated solution with iTunes? Makes no sense.
    20 Sep 2013, 03:30 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Did you delete google maps, too? /sarcasm
    21 Sep 2013, 12:33 AM Reply Like
  • ClintH
    , contributor
    Comments (98) | Send Message
     
    Actually yes. apple maps is way better now that the bugs have been worked out.
    21 Sep 2013, 01:25 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Even if you are happy with "good enough", maybe others won't be, something you should consider when you are investing. Google maps is the most used app in the world and is lightyears ahead of Apple (routing, directions, crowd sourced traffic, actually knowing where things are, street-view, etc). http://bit.ly/1gMPCkM
    21 Sep 2013, 05:57 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2623) | Send Message
     
    P is up like 20% since the iradio announcement!
    20 Sep 2013, 03:50 PM Reply Like
  • ClintH
    , contributor
    Comments (98) | Send Message
     
    Don't get used to it. IOS 7 has only been out a day or two. For most, they haven't found iRadio yet. My kid found it on the first day and guess what... she loves it. Scraped her Pandora already.
    20 Sep 2013, 03:57 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Are you basing your short on your daughters pick? (Lol.) I'm using iTunes Radio just to see what I think and their song recommendations are ATROCIOUS! Try it yourself, I think no matter what you put in it resorts to mainstream hits. I suppose that is good if your tastes are more mainstream, which is certainly a lot of listeners. But my 14 year old son is picking Pandora over iTunes Radio (his words: "it sucks" lol). I think a saavy investor needs to consider the value of the Pandora "genome", it's why they have grown so large while the rest have stagnated.
    21 Sep 2013, 12:51 AM Reply Like
  • ClintH
    , contributor
    Comments (98) | Send Message
     
    No... I'm basing my short on the fact that P does not make any money and now has a gorilla of a competitor. How do you think this will end for P?
    21 Sep 2013, 01:26 PM Reply Like
  • mikiveliki
    , contributor
    Comments (19) | Send Message
     
    Over 50k tweets on the keywords itunes Pandora. Great majority, in fact almost all in favour of iRadio http://bit.ly/1b2BCGj
    21 Sep 2013, 05:01 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    "does not make any money"

     

    Not a good investment thesis for growth stocks ClintH. What you want to look at is if the company *will* make money in the *future* (requires some homework here ClintH, can't emphasize this enough).

     

    "and now has a gorilla of a competitor"

     

    This is a good thesis if the gorilla's heart is in it, but the quality of iTunes Radio says that it is not.

     

    "How do you think this will end for P?"

     

    Another double within a year.
    21 Sep 2013, 06:27 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    So to declare a majority, you read 25k of them? (lol)
    21 Sep 2013, 06:49 PM Reply Like
  • Cintos
    , contributor
    Comments (94) | Send Message
     
    dgulick suggests a good investing strategy: "What you want to look at is if the company *will* make money in the *future* "

     

    Really? Well, yes if you feel the market should continue on with its hatred of companies who actually make $$$ and love of those who loose money every year. What is that all about? Certainly not the capitalism I was raised on.
    23 Sep 2013, 09:32 AM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Good point Clintos, value stocks have been neglected over the last several years, a good place to be looking for bargains. Though it should be kept in mind that the reason value companies have been neglected has a lot to do with the financial mess some of those "value" companies got into! My only point is that, with a growth company (and P is one, along with AMZN, NFLX, etc) you need to attempt to predict their income after they scale.
    23 Sep 2013, 11:20 AM Reply Like
  • ClintH
    , contributor
    Comments (98) | Send Message
     
    Hey... whatever happened to Napster??? That will be the question asked of Pandora in about a year.
    20 Sep 2013, 03:56 PM Reply Like
  • awakeinwa
    , contributor
    Comments (308) | Send Message
     
    I no longer use P. the native integration rocks. no more fiddling with html5/tabs in haystack. itunes radio's sound quality's better. tweaking your itunes with its coverflow-ish UI is more natural and discoverable, which surprised me a bit; always thought before this coverflow took up too much space, at least when you're managing file systems. but for music, beats the pants off P's list driven customization UI.
    20 Sep 2013, 03:57 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    You really have a problem with those html5 tabs! Others would argue that having to run iTunes is a way worse proposition! Though really mobile is where this battle will be waged, everyone on these pages forgets that more than half of Pandora's users aren't even on Apple products! So even if ALL of iPhone users jump to iTunes Radio (I'm one, won't be switching any time soon!), there is still a rather high floor under these shares!
    20 Sep 2013, 04:03 PM Reply Like
  • ClintH
    , contributor
    Comments (98) | Send Message
     
    Good luck with that thinking.
    21 Sep 2013, 01:27 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    thanks
    21 Sep 2013, 06:50 PM Reply Like
  • SoCalNative
    , contributor
    Comments (488) | Send Message
     
    Apple feelings aside I really like iRadio!

     

    I've aready heard songs I didn't know and have purchased several tracks already. After 1 day.

     

    I'm listening to it at my desk right now. Dig it.
    20 Sep 2013, 04:11 PM Reply Like
  • Dukester
    , contributor
    Comments (79) | Send Message
     
    Like the mix on all the stations I've listened to so far. Outlaw country, classic country, LA rock scene. Never had Pandora so don't know about them,,gotta go listening to david alan Coe....see ya!
    20 Sep 2013, 04:27 PM Reply Like
  • bgold1955
    , contributor
    Comments (2068) | Send Message
     
    Duke.... Gotta try Sinatra radio. Mix was awesome with many similar from 1940-2012 artist with a kinda soulful/jazzy and smooth voices. Listened for hours.
    20 Sep 2013, 04:37 PM Reply Like
  • Joshua Chin
    , contributor
    Comments (70) | Send Message
     
    I can't believe I just got a playlist recommendation of SA hahha. Thanks bgold :)
    21 Sep 2013, 09:04 AM Reply Like
  • StVrainGuy
    , contributor
    Comments (12) | Send Message
     
    Listening to iRadio, Jazz Showcase on my PC right now. Great mix, perfect while I'm working. Execution is so key. Long APPL. Looking forward to Apple addressing TV in similar fashion.
    21 Sep 2013, 04:09 AM Reply Like
  • arisun
    , contributor
    Comments (7) | Send Message
     
    What if Pandora loses %20 of its listeners
    http://onforb.es/1b1boE7
    21 Sep 2013, 04:25 AM Reply Like
  • superuser
    , contributor
    Comments (14) | Send Message
     
    I hope Tim Cook is reading this, it took me 5 minutes to find itunes Radio within in itunes. My age is 21, other than that itunes radio has international music selection that Pandora won't even match if it was around for another 10 years.
    21 Sep 2013, 04:34 AM Reply Like
  • Cwaechter
    , contributor
    Comments (7) | Send Message
     
    I'm currently sitting at my desk on a US Military Base in Afghanistan listening to iTunes Radio. I had tried Pandora over here with little to no success. iTunes Radio streaming great on the Local GPRS Signal.
    21 Sep 2013, 04:38 AM Reply Like
  • Bob Sutton
    , contributor
    Comments (70) | Send Message
     
    I've been a Pandora premium subscriber for a couple of years and I don't understand the SA comment about "the time invested by its 72M+ active users in creating custom stations".

     

    Seeding a new station with either service is virtually instantaneous and I've never seen much variation from one session to another when I curate Pandora's suggestions with the "Like/Dislike" controls. If there are truly users who have invested significant energy shaping Pandora's output, wouldn't that eventually be akin to creating static playlists? We experience "radio" for the surprises, right?

     

    Much as I've enjoyed the ease of pumping Pandora through an A/D converter with AirPlay, iTunes Radio will gut Pandora's business.
    21 Sep 2013, 12:36 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    "the time invested by its 72M+ active users in creating custom stations"

     

    Here's an experiment, pick your favorite artist and make 2 stations, one on Pandora and one iTunes Radio and see what you think. For me and a couple of friends that have tried iTunes Radio, it's downright insulting! I’m under the impression it does little more than check the genre that they categorize that artist (so country, hip-hop, jazz, pop, etc) and play songs from that genre. This is the reason so many streamers have failed to compete with Pandora’s genome and I think iTunes Radio is next. Pandora uses 450 attributes to categorize songs (basic rock structures, mild rhythmic syncopation, extensive vamping, subtle use of vocal harmony -- on my son's Eminem station they have west coast rap roots, club rap roots, east coast rap roots, hardcore rap roots!). I also saw somewhere that clicking "don't play this song again" (iTunes for "thumbs-down) iTunes doesn't actually take this input and modify the future song selections, it merely doesn't play *that* song!

     

    Sorry iTunes Radio, but if personalized radio doesn't play songs that you want to hear, it’s done!
    21 Sep 2013, 07:45 PM Reply Like
  • pocohonta
    , contributor
    Comments (584) | Send Message
     
    @dgulick: based on your comments, either you own a boatload of P stock or you are an Pandora employee. No casual P customer would go through such length as to defend the company like you did. Nothing against P but this is so obvious.
    21 Sep 2013, 11:00 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Yes, I'm long P. Everyone on here is on one side of the trade they are commenting on, it's usually not hard to determine which side. But I like to think that the community of SA contributors are all here to help each other *Seek Alpha*. Whether the alpha is gotten by being long or short doesn't matter, as long as we can determine which way the future price of a particular issue is going to go by engaging in a lively informed debate, then we all benefit. I like to think of my comments as helpful, because (in this case) the shorts are wrong and should cover before they lose more money! (lol)
    22 Sep 2013, 03:27 PM Reply Like
  • desidude420
    , contributor
    Comments (2) | Send Message
     
    totally agree!!!
    22 Sep 2013, 10:47 PM Reply Like
  • Bob Sutton
    , contributor
    Comments (70) | Send Message
     
    Dgulick, I did do what you described and was very pleased by the sequence iTunes Radio built off "Bill Evans" as a seed. The depth of their jazz catalog and relevance of the tracks beats my Pandora station using the same seed, where they tend to recycle after an hour or two and lots of the selections are from within Bill Evans' own discography. I've been delighted with Pandora for several years and don't offer this experience just to talk my book, but I'm impressed with Apple's streaming radio product and think it will easily take some marketshare. I do appreciate your perspective though and will give it another try using '60s R&B as my seed. I'm pretty familiar with the artists Pandora matches with "Marvin Gaye" or "Otis Redding", so the comparison should be easy.
    23 Sep 2013, 11:54 AM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Thanks for the research! I'm not a big jazz guy so that is helpful. After a weekend of hitting my 6 song skip multiple times I have a station that still plays some mainstream pop that in my opinion is nothing like the seed artist, but it is definitely getting better. My son immediately jumped back to P (though he's pretty ADHD when it comes to tech!).

     

    I think for many, iTunes Radio is a bit like Apple Maps, certainly not as good as Google Maps, but good enough, and iTunes Radio will certainly take some market share from P, but the streaming market growth is going to bo so large that it can accommodate both (I remember many thought Amazon when they got into movie/TV streaming was going to eat Netflix alive, didn't happen, the same will happen here, Pandora will be fine).

     

    Here's an article I found that was pretty close to my opinion (I personally experienced iTunes Radio playing me a song I had told it to "never play again!", and only 2 songs later! This happen to you?):
    http://bit.ly/18RPTxO
    23 Sep 2013, 12:49 PM Reply Like
  • Bob Sutton
    , contributor
    Comments (70) | Send Message
     
    Thanks for the link. I haven't pulled the plug on Pandora One yet, but am still impressed with the initial release of iTunes Radio and will run some more tests using narrower interests like "Renaissance Flute" or whatever where the catalogs are smaller.

     

    Needless to say, anecdotal tests of any playlist's relevance to a seed will be, at best, subjective. I'm a fan of Pandora's "Musical Genome" algorithmic approach to cataloging music (and machine learning, in general), but won't discount the value great DJs improvise with surprising juxtapositions of mood or vibe. (I've also seen the algorithm follow itself off-theme after a few dozen cuts without my intervention, so over an hour or two you inexplicably segue from Barry White to Katy Perry.) As you say, early days.
    23 Sep 2013, 04:09 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Here's another review, this one is spot on: http://rol.st/1fvgmZb
    "Would it succeed without being installed on every capable Apple music device in the known universe? Highly unlikely."

     

    Also, a comment from that article germane to our discussion of musical genres:
    "iTunes radio may be great for some genres but not for classical. "

     

    Be sure to let me know what you think as you create your "Renaissance Flute" station! My thinking at this point is that iTunes Radio will be "good enough" for many, in particular for those new to streaming or with very mainstream musical tastes. But if you have a lot of Pandora stations you are going to stay put (btw, I'm back listening to P, just couldn't take it! iTunes Radio not really suggesting music I like! I'll try harder!!! Also sound quality on iTunes Radio is noticeably not so great, though maybe I'm spoiled, Pandora One is 192 kps). But really, I was only trying to recreate a few of my Pandora stations, forget my Classical, my wife's hippie trippie/new world, my son's Eminem, my daughter's Taylor Swift, the Johnny Cash for when the inlaws are in town, not to mention our Halloween and Christmas stations that sit waiting for that season to roll around! (and on and on, we keep hitting the 100 station limit every time we create a new one!) I guess I'm not a typical user though, since I'm one of their 3.2M subscribers, but I see no reason to give up my Pandora!

     

    (Btw, "inexplicably segue from Barry White to Katy Perry" cracked me up! That seemed to be what was happening to my station, though maybe it just needs more input! Early days indeed!)
    23 Sep 2013, 04:30 PM Reply Like
  • dgulick
    , contributor
    Comments (1556) | Send Message
     
    Bob,
    Here's another one, and I think is helpful in understanding why some like it, some don't. They conclude that music in iTunes Radio is categorized better for some genres than others. In general, Pandora cataloging is much better/more comprehensive, but this will be more or less noticeable depending on your particular musical tastes. We'll see if this difference is enough to keep people listening to P in a couple weeks when they report September metrics.
    http://usat.ly/19yryy0
    23 Sep 2013, 07:12 PM Reply Like
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