Let me be clear. Bears are good for the stock market. On some stocks, I am as bearish as the next guy. But Pandora is not a stock that trades 50 million shares per day. It reacts to the type of tripe Greenfield puts out on a consistent basis. It's not his bearishness, in and of itself, that's the problem. It's his refusal or inability to consider the bigger picture, to tell the whole story.
He singlehandedly set off a media firestorm with the Songza report, and it's hardly newsworthy. As I noted last week, a move up and subsequent changes in a company's ranking in the App Store are hardly news. At the very least, provide some context.
Songza spent several days at Number 2. As I write this, it's at Number 17. It's been on the decline. Keep tabs on the data; it might change by the time you read this. That should not alarm you if you're a private investor in Songza because It's not news.
These apps, be it Songza, Pandora, Twitter , Facebook (FB) or Netflix (NFLX), move up and down, trade spaces, you name it, on a daily basis. You simply cannot base competitive threats or bullish or bearish sentiment on what happens in the App Store. It's hack analysis.Services like Songza and Spotify are, without doubt, competition for Pandora. If I am in the space I join forces and send terrestrial radio to its death once and for all, but that's unlikely to happen. Or maybe not. I don't know. Irrespective of M&A prospects, investors must consider competitive threats to Pandora within the context of reality. Rarely do you see bears such as Greenfield acknowledge Pandora's encroachment on the $14 billion radio advertising market. It's ramping up a sales team that continues to take talent and local dollars away from terrestrial radio. It's becoming more integrated in the systems local and national media buyers use to obtain inventory for their clients. That's how Pandora makes money -- by going after that market aggressively. Just as it has a huge first-mover advantage in the Internet radio space, Pandora is ahead of its competition by light years when it comes to securing these advertising dollars. On the expense side, the industry will have Pandora (and Clear Channel) to thank, not Songza or Spotify, for leveling the music royalty playing field.
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