NEW YORK ( TheStreet) -- I've spent considerable time trying to make sense of Spotify's apparent $3 billion valuation. In fact, I have been trying to figure Spotify out for nearly a year now.Why is it the darling of private equity and Wall Street?
Spotify tries to play each role, specifically with respect to iTunes and Pandora. I'm sure that's possible, but Spotify just doesn't do a very good job of it. Jack of many trades, master of none. But that's all subjective stuff. For every person like me who just can't get with Spotify, there are several -- or, given the number of users it claims, like one-tenth of a person -- who love the platform. (We won't even get into Spotify's scale problem; something Pandora does not have to deal with). As a business, Spotify has no future. With Spotify in the news so much, I'm not quite certain why Pandora gets branded as the company with the unsustainable business model. That could not be farther from the truth.
iTunes: When you know exactly what you want to listen to. After all, your library contains songs you purchased and/or downloaded. iTunes also plays a key role throughout the purchase process, particularly at fulfillment. Pandora: When you want personalized radio and discovery. YouTube: You know what you want. Or you seek videos, covers, bootlegs, lyrics and/or exploration/discovery.