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Crucial Facts You Should Know About Apple vs. Pandora

Stocks in this article: P AAPL

At both the act and advertiser level, Pandora hits all ends of the spectrum; this past week Celine Dion did a "Pandora Presents" show in New York City:

The performance (was) brought to passionate fans that have added a Celine Dion station on Pandora, are located in the New York Tri-State Area and are age 21 and over. The special event will be free of charge and will take place on October 29 at the Edison Ballroom.

Pandora Head of Music Partnerships, Tommy Page, said, "Connecting artists with their fans is a central part of our mission at Pandora and with more than 70 million people listening to more than a billion hours of music every month, we offer unique capabilities through our immense pool of data and listener insights. We are thrilled to host this special evening with Celine Dion in anticipation of her Loved Me Back To Life album, where we will bring together a group of her biggest fans for an intimate first listen." Excerpt from a Pandora press release

Fans get an exclusive invite and a free show, which often includes free drinks, etc. Advertisers get the exact crowd they want: a captivated and engaged audience, thrilled to have been handpicked by Pandora (and, by extension, the advertisers) to see one of their favorite musicians. That's called goodwill and brand/relationship building.

The act wins, no matter how big or small they are.

Somebody at Celine Dion's level, a huge artist who could still use a boost ahead of a new record. Relatively small indie acts play shows to their biggest fans in packed venues where they don't have to worry about music industrial complex injustices such as pay-to-play. Thanks to Pandora's sales buy, the musicians probably make as much, if not more money for a "Pandora Presents" show as any other.

A performer, such as Mendler, with the power of the Disney platform behind her, comes in at a sort of in-between level. She could slip through the Kids-TV cracks, even with Disney's support, but Pandora helps her avoid this, thanks, in large part to ...

The Music Genome Project

From a popular culture standpoint, it makes sense that Mendler would show on Pandora users' Taylor Swift and One Direction stations. She does on my daughter's all of the time. However, Mendler keeps coming up on those stations for less obvious reasons, unless, of course, you possess an understanding of the Music Genome Project's analytical guts.

Ultimately, from a musicological standpoint, Mendler's songs fall in close proximity to songs by Swift, 1D and others that routinely appear on those stations and others like them. Pandora's music analysts rate the song's many sonic, lyrical and related attributes to determine what ends up where. Specific listener behavior -- thumbs up, thumbs down, skips, the stations users choose to create, etc. -- keeps somebody like Mendler on (or off of) an individual's personalized station(s).

That translates into exposure for Mendler that she's not going to get thanks to a half-cocked record label promotion or via a token royalty check. It's similar to the scenario I describe in the above-linked article with relation to Bronze Radio Return seeing success thanks to inclusion on Mumford & Sons Radio.

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