OPINION: Pandora (P) Isn't Dead by Any Means
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Pandora (NYSE: P) shares are lower on the session amid a recent open letter from the MusicFIRST coalition. The letter comes in response to the proposed Radio Fairness Act, which would put royalty rates Pandora gets paid on par with those that Sirius XM (Nasdaq: SIRI) enjoys.
TheStreet highlighted this article and said investors should basically liquidate positions from all the bad PR that will be generated. Admittedly, some big names are behind the move, like Amy Grant, Heart, Rush, Journey, KISS, the Doors, and so on. The article speaks out to how Pandora will lose subs like nobody's business and it will go under.
Unfortunately, that's not how business works. Founder Tim Westergren issued an open letter to artists back in October over how the outlet gets paid and that ruffled some feathers. Mostly, Pandora's beef is with SoundExchange, which has be largely not paying Pandora anything close to Sirius for a while.
Pandora is a huge deal, with millions of listeners and paying subs enjoying their favorite tunes as well as being introduced to new artists via the service since signing up. How many people out there can claim, after listening to Pandora for about an hour, that you're not inundated with a ton of new artists unless you decide otherwise?
Artists should also recognize that many people are ditching traditional radio in favor of satellite and Internet radio, meaning the way to distribute content is going through a major paradigm shift. That said, why should Sirius enjoy more of a cut than Pandora? Westergren's letter also highlights that Pandora pays for those that attract attention, with millions for big names down to thousands of dollars for up-and-coming artists with a smaller following. Click here for the letter, BTW.
Pandora is also striking deals with automakers left-and-right to get its service into new models. Arguably, driving in a car is when most people listen to music and it is certainly the bread-and-butter of Sirius.
This isn't an article arguing for or against Pandora's piece, just an observation to highlight that Pandora isn't dead in the water by any means. The letter above is signed by about 125 of the biggest names in music...but, there are also millions and millions more waiting in the wings for their chance to shine. Getting content won't be a problem for Pandora in the future; getting paid now to bring that content to millions of ears is a problem. Artists and licensing companies should both recognize this, for everyone's sake.
Shares are about 1 percent lower on the session Friday. For the TheStreet article, click here.
TheStreet highlighted this article and said investors should basically liquidate positions from all the bad PR that will be generated. Admittedly, some big names are behind the move, like Amy Grant, Heart, Rush, Journey, KISS, the Doors, and so on. The article speaks out to how Pandora will lose subs like nobody's business and it will go under.
Unfortunately, that's not how business works. Founder Tim Westergren issued an open letter to artists back in October over how the outlet gets paid and that ruffled some feathers. Mostly, Pandora's beef is with SoundExchange, which has be largely not paying Pandora anything close to Sirius for a while.
Pandora is a huge deal, with millions of listeners and paying subs enjoying their favorite tunes as well as being introduced to new artists via the service since signing up. How many people out there can claim, after listening to Pandora for about an hour, that you're not inundated with a ton of new artists unless you decide otherwise?
Artists should also recognize that many people are ditching traditional radio in favor of satellite and Internet radio, meaning the way to distribute content is going through a major paradigm shift. That said, why should Sirius enjoy more of a cut than Pandora? Westergren's letter also highlights that Pandora pays for those that attract attention, with millions for big names down to thousands of dollars for up-and-coming artists with a smaller following. Click here for the letter, BTW.
Pandora is also striking deals with automakers left-and-right to get its service into new models. Arguably, driving in a car is when most people listen to music and it is certainly the bread-and-butter of Sirius.
This isn't an article arguing for or against Pandora's piece, just an observation to highlight that Pandora isn't dead in the water by any means. The letter above is signed by about 125 of the biggest names in music...but, there are also millions and millions more waiting in the wings for their chance to shine. Getting content won't be a problem for Pandora in the future; getting paid now to bring that content to millions of ears is a problem. Artists and licensing companies should both recognize this, for everyone's sake.
Shares are about 1 percent lower on the session Friday. For the TheStreet article, click here.
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