This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Pandora Crashes, But Is It Dead?

Music labels want Pandora to charge a subscription fee and enter direct licensing agreements. Of course that's what they want because that puts more money in the music industry's pocket and less in most artists' bank accounts. Plus, it makes Internet radio an impossible business.

Stress this: The ONLY way forward is a compulsory license scheme where, across platforms, everybody pays something close to the same amount. One company cannot continue to pay 7% of royalties, another 15% and another 55%. It's just absurd.

That's the answer. Moving to a subscription-based model like Spotify is absolutely not the answer. It would be a disaster for everyone -- the business and the consumer.

You cannot scale a subscription model like Pandora has scaled and continues to scale the free model. Spotify proves that. Look at how much it has spent, yet it has barely made a dent in the U.S. market. Without scale, you can't sell advertising; without advertising, you don't have a business.

Pandora has scale at 59 million active listeners in the U.S. only. Spotify has no scale at 15 million listeners worldwide.

We're approaching pivotal times in what comes down to a battle between compulsory versus direct licensing and a war of two different world views.

Ultimately, as Pandora's market share continues to grow, traditional radio's footprint gets smaller and Spotify's deficiencies go public (that love affair is about to end), Pandora -- not the music industry, not disingenuous Clear Channel and surely not Spotify -- has the edge.

The labels will not win this fight. Pandora's on the right side. As its popularity grows, so does its leverage. As Pandora makes its case in Congress and people such as myself spend weekends writing about the issue, that will become clear.

Interesting stuff to talk about. Fascinating actually. But, with relation to the stock, it's even noise. At least right now.

The stock stinks unless you trade it nimbly or really love it and salivate at "cheap" shares. I would not touch it until Pandora retakes control of the royalty conversation in Washington.
3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
FB $105.45 0.00%
NFLX $125.44 0.00%
P $13.73 0.00%
GOOG $750.26 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs