Pressure on Pandora (P) Just Got Multiples Worse...
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Pandora (NYSE: P) shares are sharply underperforming other US stocks Friday as reports are suggesting competition is about to heat up. The stock last traded at $9.80, down 6 percent from Thursday's close, compared to an about 1.4 percent gain in the broader averages.
According to CNET, Spotify is making a stronger move to compete more wholly with Pandora. Traditionally, Spotify's format allows users to focus on specific songs or albums that a user chooses. But now, Spotify is set to unveil a "radio" option for it's platform, allowing users to pick a station and then Spotify acts as a "virtual DJ" in selecting the next song which matches the genre.
...Just like Pandora.
Here's the thing: at a Paris event Friday, CEO Daniel Ek said Spotify has worked out the ability to allow users "unlimited skipping and unlimited stations." For Pandora, skipping is a costly venture because it pays labels by the song.
From the Spotify blog, "Starting a radio station is easy. Click 'Start Artist Radio' at the top of any artist page or just drag a track to 'Radio' in the left sidebar. Spotify will make a radio station of similar music...Your station will keep playing music based on your initial choice. Thanks to our all-new intelligent recommendation engine and multi-million track library, Spotify Radio is a music discovery experience without equal."
But will Spotify's new addition kill off Pandora? Probably not. Although Pandora and Spotify are direct competitors -- unlike Facebook and Twitter -- there's the "immersion" catalyst that needs to be overcome. Users of Pandora have been doing so for a while, and are used to the interface and, sigh, even the commercials. This author is not personally a Pandora user (Grooveshark!), but should Spotify be able to deliver with strong song selections and limited interruptions, erosion of Pandora's market share might take place...and soon.
For more from the Spotify blog, click here.
According to CNET, Spotify is making a stronger move to compete more wholly with Pandora. Traditionally, Spotify's format allows users to focus on specific songs or albums that a user chooses. But now, Spotify is set to unveil a "radio" option for it's platform, allowing users to pick a station and then Spotify acts as a "virtual DJ" in selecting the next song which matches the genre.
...Just like Pandora.
Here's the thing: at a Paris event Friday, CEO Daniel Ek said Spotify has worked out the ability to allow users "unlimited skipping and unlimited stations." For Pandora, skipping is a costly venture because it pays labels by the song.
From the Spotify blog, "Starting a radio station is easy. Click 'Start Artist Radio' at the top of any artist page or just drag a track to 'Radio' in the left sidebar. Spotify will make a radio station of similar music...Your station will keep playing music based on your initial choice. Thanks to our all-new intelligent recommendation engine and multi-million track library, Spotify Radio is a music discovery experience without equal."
But will Spotify's new addition kill off Pandora? Probably not. Although Pandora and Spotify are direct competitors -- unlike Facebook and Twitter -- there's the "immersion" catalyst that needs to be overcome. Users of Pandora have been doing so for a while, and are used to the interface and, sigh, even the commercials. This author is not personally a Pandora user (Grooveshark!), but should Spotify be able to deliver with strong song selections and limited interruptions, erosion of Pandora's market share might take place...and soon.
For more from the Spotify blog, click here.
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