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's Absolutely Not Screwed; It's In the Driver's Seat

NEW YORK ( TheStreet) -- I read two articles about Pandora (P - Get Report) over the weekend that stuck with me. One for how mind-numbingly horrible it is. Another because it provided a rare occasion where a writer actually presents a real understanding of not only what Pandora does, but the direction Internet radio heads.

A couple blokes put together a piece for Motley Fool centered around two completely asinine -- and plainly false -- ideas:
  • Pandora "has no intellectual property, leaving its business ripe for disruption"; and
  • Music listeners love Pandora, but it "has few supporters on Wall Street."

Second absurdity first. "Music fans" and "millions of devotees" have not run the price of Pandora stock up 97% since it hit mid-November lows. That would be Wall Street, thanks in large part to the emergence of a better understanding of exactly why the company, despite senseless noise, runs near the front of the mobile advertising revolution and will continue to not only lead Internet radio and disrupt terrestrial.

First absurdity second. Pandora's business has been "ripe for disruption" for years. Competitor after competitor has come in and done absolutely nothing to slow Pandora's growth. In fact, the growth has never stalled. In terms of listener hours and revenue, particularly on mobile, the company is as healthy as it has ever been. Don't expect that trend to reverse, even if Apple (AAPL - Get Report) hits the market with an iRadio product.

Pandora's most important piece of intellectual property -- the Music Genome Project -- sets it apart. In this video conversation, Pandora Co-Founder and Chief Strategy Office Tim Westergren traces the history of how the MGP spawned Pandora and gives it its massive edge today:

I feel like I have to hold people down, rough them up and threaten the safety of their families to get them to sit still long enough to comprehend the impact of the MGP. You don't just walk in and, overnight, disrupt the advantage the MGP gives Pandora in the areas of personalization and discovery or the head start it has building out sales infrastructure to gobble up an ever-increasing chunk of traditional radio's $14 billion to $16 billion advertising market. Not if you're Apple, not if you're Spotify. Pandora's continued growth and the growing number of entrants attempting to snag a piece of it only validates the company's model.
1 of 2

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 $93.74 0.00%
P $9.93 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs