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FYI: What Spotify Just Announced, Pandora, Rdio Already Do

Stocks in this article: P AAPL

NEW YORK (TheStreet) -- The media will go into hype mode as the official release of the week's big Spotify news just hit.

In fact, as of late morning, investors had knocked shares of Pandora (P) down by about 5%. That's modest, relative to how wildly P used to gyrate on news it was about to get "crushed."

There will be no crushing here.

If you have read me for more than a minute, you know I love all Internet radio. It's, by far, the best space we've got working for us as consumers. And, for the most part, it's pretty imaginative. There's tons of great stuff happening from tiny, but sharp, bootstrap startups to behemoths such as Yahoo! (YHOO) quite possibly set to shape new multi-billion dollar categories.

So this is not a Spotify bash. It's just a reality check for a sector filled with sensationalized misinformation.

The move to free mobile listening -- the most talked about from the aforementioned announcement -- comes as no surprise. That's Pandora's bread and butter. And Spotify needs scale.

It needs scale because it needs to show growth in listenership to justify its cash burn. While I don't buy all the Spotify-to-Netflix (NFLX) comparisons, they do have one thing on common -- both companies keep investors and observers confident by showing user growth.

Spotify also needs scale to be able to sell a meaningful amount of advertising, particularly on mobile, an area where Pandora has, and this is understating things, a head start.

But, beyond the free mobile experience (which, as on the desktop, becomes a much better experience when you pay), Rdio already does everything Spotify announced today. And where Rdio doesn't do it, Songza and Apple's (AAPL) iTunes Radio does.

From the press release, I just received via email:

Today, Spotify announced new free music experiences for mobile and tablet.  Available today, Spotify's new mobile experience allows you to shuffle play
-Your music: Listen to the playlists you create, and to those from the people you follow

Rdio does it. Quite cleanly I might add.

-Your favorite artists: To listen to a specific artist, just hit shuffle play to listen to their entire catalogue -= no settling for one track every 20 minutes from the artist you want

Again, Rdio has got you covered. And the "no settling for one track every 20 minutes from the artist you want" line, an obvious shot at Pandora, misunderstands Pandora. Pandora is personalized radio. Sometimes that's what you want. Sometimes you know what you want. When you do, you go on demand or to your iTunes collection.

Diversity. Choice. Wide selection and means of delivery. The beauty of Internet radio. Something Spotify should champion for the good of the music industry, not mindlessly chide as it bites Pandora's ankles.

-Discover great new playlists: Listen to playlists for every mood, genre, or moment in time

Songza. Apple. They do this.

I provide this FYI not to "hate on" Spotify. I like Spotify. For many situations in my music listening life, it's a go-to app. Just like Rdio, Pandora and iTunes have been and likely always will be. I provide the FYI to cut through the clutter that Spotify somehow changed the game today or, for the 389th time, put Pandora out of business.

These claims are patently false. The folks who make them pathetically irresponsible.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist for TheStreet. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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