Pandora -3.1% following Amazon report


A BuzzFeed report stating Amazon is set to launch a streaming music service (covers songs at least 6 months old) that will be free for Prime subs is leading Pandora (P) to slump.

Amazon's Prime sub base (~20M as of January, per Macquarie) is notably smaller than Pandora's active listener base (76M at the end of April) for now. Pandora, aided by its giant music-tagging database (i.e. the Music Genome Project) and the time invested by users in creating custom stations, has thus far weathered challenges from Spotify, Apple, and Google, among others.

Shares largely moved sideways yesterday after Apple announced it's acquiring Beats and its subscription streaming service.

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Comments (24)
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    I think Amazon Prime will be the biggest threat to Pandora simply on the fact that this bundled service with no ads and ondemand service adds no additional cost to already subscribed Prime members. So in effect, everyone who has a Prime subscription just going to ditch Pandora for Prime music service.

     

    Which would you pick? Free no ads on demand music or radio ad filled service?
    30 May 2014, 11:07 AM Reply Like
  • Gnawkz
    , contributor
    Comments (117) | Send Message
     
    The other side of the argument is NFLX and Amazon Video. Even though Amazon Video is offered for free to Prime subscribers, NFLX is still growing by leaps and bounds and appears to be completely unaffected.

     

    Not completely comparable, but still a potential scenario to consider.
    30 May 2014, 11:38 AM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    There is major difference, Netflix has exclusive content and rights and is an on demand service.

     

    To compare you could say Pandora is more like Hulu than Netflix. And Hulu isn't doing so well.

     

    Let's not also forget Netflix going to raise its subscription fee so we have wait to know what kind of impact that will do to user growth.

     

    As Amazon piles up more services on a single charge, harder to stay with single services unless the competitor has something special to offer that Amazon don't have.

     

    In Pandora's case, they have nothing special to offer.
    30 May 2014, 11:59 AM Reply Like
  • Gnawkz
    , contributor
    Comments (117) | Send Message
     
    I will argue against the major difference regarding exclusive rights and content. NFLX has exclusive content and so does Amazon. Currently, NFLX has the better exclusive content with House of Cards and such. BUT ... Amazon did just sign on HBO's older shows such as Sopranos. In the future, maybe NFLX will make some bad bets on content and Amazon makes better bets, then the tide might shift.

     

    But ... the main point is that you and I both agree it is not completely comparable, just on different levels. All I was trying convey was that it is still a possible scenario, maybe one of lower probability, but not completely out of this world.
    30 May 2014, 12:12 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    In other news, another major blow to Pandora
    http://bit.ly/1ps01eo
    30 May 2014, 12:43 PM Reply Like
  • Ben Hanson
    , contributor
    Comments (524) | Send Message
     
    Ouch. Looks like this type of service is getting comodotized and fast.
    30 May 2014, 01:03 PM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    All of these competitors are years behind P, behind in playlists (40B thumbs), behind in monetization, behind in ubiquity. If Apple, who owns the largest platform of P's user base (40% of P streaming is over an iProduct), couldn't put a dent in P's growth, what luck will Amazon have? 15% of P's streaming is now over connected devices (not computers or smartphones), as the "internet of things" migration continues, consumers will choose a radio service that is everywhere, in your car (P in the dash of 135 car models, 1/3 of all new cars sold), living room (Roku, Chromecast, etc), wearables, etc.

     

    P's listener metrics for May due out next week.
    30 May 2014, 01:50 PM Reply Like
  • itscalledcommonsense
    , contributor
    Comments (2536) | Send Message
     
    Behind in monetization? What?

     

    iTunes = profitable
    Pandora = seemingly endless stream of losses
    1 Jun 2014, 10:22 AM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    It's not a question of itunes making money, it's whether itunes *radio* can make money, advertising has never been Apple's forte. But even their success does not mean Pandora's failure, stolen FM ad revenue so far is only the tip of the iceburg.
    1 Jun 2014, 11:42 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    You are hilarious dgulick even with no competition Pandora hasn't made money, it won't get better with more competition, especially now that Apple is going full force against Pandora.

     

    Not to mention todays news that Spotify allowing your entire collection of music offline!! That totally solves the data issue.

     

    Too bad Pandora will never be allowed to do such a thing because it classed itself as Radio, talk about double edged sword.
    2 Jun 2014, 04:17 PM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    Pandora has always had competition, most of which are defunct, fallen (or falling) before the might of the genome (AOL, Yahoo! Music, Last.fm, iHeartRadio, Rhapsody, Slacker, among others). We'll see how these newcomers do.

     

    Also, it would be very simple for P to add on-demand if they wanted to, but 80% of listening has historically been "lean-back", i.e., radio, and as such has 4x revenues ($21.4B/yr) compared with "lean-forward" on-demand listening sales: CDs, digital downloads ($5.3B/yr). P is pursuing radio because it's a larger opportunity. There is continuous comparison to on-demand services since they are so similar (both stored in the cloud and streamed to your phone), but they are different businesses with different costs (on-demand royalties are 3x what P pays per song) and therefore very different price-points for the consumer.
    2 Jun 2014, 05:05 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    PANDORA CAN'T ADD ON-DEMAND, THEY JUST FOUGHT ENTIRE LAWSUIT TO BE CONSIDERED AS RADIO, IF THEY WEREN'T THEY WOULD BE EATEN ALIVE BY INCREASED ROYALTY COSTS.

     

    WHEN COMPETITION IS AMAZON, GOOGLE AND APPLE IT'S FUTILE ESPECIALLY FOR A COMPANY THAT CAN'T MAKE MONEY!

     

    SPOTIFY NOW HAS 10M SUBS > PANDORA WAS FOUNDED 6 YEARS EARLIER THAN SPOTIFY, LOL.
    3 Jun 2014, 09:02 AM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    Pandora *can* add on-demand, they simply would need to negotiate direct deals with the labels, this would be for an upgraded service, it would have no impact on their radio service. I only make this point to say that P is choosing the radio route, due to it being a larger opportunity.

     

    Also, regarding competition, you know who else is in competition with Amazon, Google and Apple? Every other tech company! (Netflix, Spotify, Adobe, Facebook, Twitter, Microsoft, Yahoo, Ebay, IBM, Samsung, Intel...) Not to mention Amazon, Google and Apple compete with each other! (Still think Google will respond to the Apple/Beats deal by buying Pandora).

     

    "SPOTIFY NOW HAS 10M SUBS > PANDORA WAS FOUNDED 6 YEARS EARLIER THAN SPOTIFY, LOL. "

     

    That would be a great comparison if they were both pursuing on-demand listeners. Spotify and Pandora are after 2 distinct markets, Pandora is pursuing the "lean-back" free/ad-supported listener (the manner in which 80% of music has traditionally been consumed), and they are succeeding (P has 6x as many users as Spotify).
    3 Jun 2014, 09:42 AM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    Behind monetization? LOL YOU MEAN THAT BABY STEP? PANDORA HASN'T MADE MONEY OVER 12 YEARS!!!

     

    APPLE DOESN'T NEED TO MAKE MONEY, IT JUST NEEDS TO CRUSH THEM AS ANOTHER ADDED SERVICE TO THEIR ECOSYSTEM.

     

    WITH RECORD LABELS ON THEIR SIDE ON BEATS ACQUISITION, PANDORA GOT NO CHANCE!
    30 May 2014, 03:29 PM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    "PANDORA HASN'T MADE MONEY OVER 12 YEARS!!!"

     

    Yeah, but break even and quickly improving margins is further along than any of their competitors. But its not about making money right now, it's about market share, and P dwarfs all of them, including iTR.

     

    "WITH RECORD LABELS ON THEIR SIDE ON BEATS ACQUISITION, PANDORA GOT NO CHANCE! "

     

    Do you really think that Iovine's influence won't be slightly diminished now that he's an Apple employee? Not to mention P doesn't do direct deals, their royalties are set by judges, a group that doesn't seem too sympathetic to Apple right now -- did you know Denise Cotes, who recently ruled in Pandora's favor in the ASCAP case (and in her findings dismissing claims that iTunes Radio rates should be considered fair market value, because “Apple is willing to lose money on music to make money on hardware,”) is the same judge that gave Apple a smackdown in the ebooks price fixing scandal!
    30 May 2014, 03:59 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    Who cares about 1 judge which kept rate same (did not even lower it), because these lawsuits WILL CONTINUE with every renewal of contract with Pandora and every new lawsuit brings a wildcard of a new Judge until they pass the music legislation which is even worse news for Pandora.

     

    Lovine didn't succeed because of who he knew, he succeeded because he is the best and the best now working with best technology company Apple.
    3 Jun 2014, 01:51 PM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    ASCAP was seeking 3% of P's revenue, P was arguing they should pay the same as traditional radio, 1.7%, when this range is considered, maintaining their 1.85% is a win for P. (this will also set a precedent going forward for upcoming BMI and CRB.)

     

    Also, music legislation is not bad news for P, many think it will be neutral, but others think it could actually be good news, even if P's costs are left unchanged, it could likely hit SiriusXM (which pays less to labels) and traditional FM (which pays nothing), which would benefit P. Also, though there is plenty of complaints from songwriters regarding P's payouts, you don't here the performers/labels complaining. Why? because it could be argued that they are being paid too much (50% of P's revenues, compared with 9% for SiriusXM).

     

    Iovine is a talented man, but don't be fooled, the labels have been at odds with Apple ever since Jobs broke up the album and allowed users to buy individual songs (he had help in these negotiations from Napster and piracy!). But the eventual result of the ipod from the labels perspective is little more than a revenue haircut of 50% (CD/physical sales down -83% from their highs in 1999!) meanwhile Apple raking in the bucks from hardware and iTunes sales.

     

    Next direct deal between Apple and the labels? Iovine is going to look like a sellout.
    3 Jun 2014, 05:16 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    WELL YOU GOING TO LOVE THIS LATEST NEWS, KEEPS GETTING BETTER FOR ME WORSE FOR YOU.

     

    ASCAP and BMI consent decrees up for review after Pandora pull stalled - See more at: http://bit.ly/1hyFT8b

     

    U.S. to Review Rules Covering Pandora Songwriter Fees
    http://buswk.co/1hyH085
    4 Jun 2014, 08:05 AM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    The songwriter fees are only 8% of P's licensing costs, they actually probably should be higher relative to what the label and performer are paid (though others would argue that the labels are paid too much).

     

    But Universal, the largest publisher, already pulled out of BMI in order to do a direct deal with P (then they went back under BMI because they lost too much $ from other sources, but P kept the direct deal, I suspect because it had provisions that P wanted to keep that would allow for international expansion). But as P continues to grow, eventually the money the publishers can get from P will be larger than what BMI collects and they will all withdraw and do direct deals.

     

    Yes, this will hurt P's cost structure slightly, but contrasting that will be the artists endorsing P, and legitimizing the business model since by then P will not need to rely on consent decrees for licensing their content.
    4 Jun 2014, 01:30 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    lol Artists don't care about cost structures, they only care about making money unlike Pandora who seems to not make money for anyone but for insiders.

     

    Songwriter could care less if they playing their song with Pandora, Spotify or iTunes, they just want a fair share. At this point, Pandora for most artists is a rip off blood sucker.

     

    If Pandora really cared for songwriters, they wouldn't go to court with ASCAP or attempt to change laws to screw songwriters.

     

    So have we finally found a dgulick that is diverging from management decisions?
    4 Jun 2014, 05:08 PM Reply Like
  • dgulick
    , contributor
    Comments (2268) | Send Message
     
    "Pandora for most artists is a rip off blood sucker."

     

    Not for performers, CRB rates are very high.

     

    "So have we finally found a dgulick that is diverging from management decisions? "

     

    No, I completely agree with the ASCAP trial as the win sets a precedent for the big prize: CRB. And I don't think songwriters should be paid more by P, I think labels should be paid less. But I also think FM's exemption from having to pay performers to play their music is wrong (no country outside the US does this), and I think SIRI should pay more to performers *and* songwriters!

     

    Labels did a good job lobbying for CRB rates but unfortunately at the time, ASCAP and BMI were asleep at the wheel, and so P is paying what is legally required of them, but even at that royalties amount to half of P's revenues! The blood suckers are the record labels!
    4 Jun 2014, 05:31 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    Yep everyone is wrong except your precious Pandora lol
    4 Jun 2014, 06:27 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    LOL you are hilarious!

     

    Apple makes money, its not about money its about growth.

     

    Spotify gains 10m subscription, its not about subscriptions its about turning a profit.

     

    You are hilarious! Say anything to peddle your interest for the moment.

     

    APPLE WILL CRUSH PANDORA, with current news crushing coming harder and faster.
    30 May 2014, 04:08 PM Reply Like
  • manicdvln
    , contributor
    Comments (1540) | Send Message
     
    Pandora Stock Looks Pricey Even After Selloff

     

    http://on.barrons.com/...
    4 Jun 2014, 05:25 PM Reply Like
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