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

Here's Why Pandora Keeps Crushing the Market

NEW YORK (TheStreet) -- I'm not sure any of the companies that streamed (pun horribly intended) into the Internet radio space on the back of Pandora's (P - Get Report) success, including Spotify, truly understand the opportunity Pandora has seized and continues to concurrently chase and dominate since deciding to redefine radio.

The only exceptions -- Apple (AAPL - Get Report) and Google (GOOG - Get Report).

They don't need to understand Pandora's opportunity. In fact, it's immaterial. Apple and Google do not run the risk of wholesale failure if they do not succeed at Internet radio. Because they're not in it for any other reason than to prop up their already lucrative core line(s) of revenue.

They're not out to "crush" Pandora.

Must Read: Jim Cramer's 6 Stocks in 60 Seconds: VMW PCLN EW SEAS AOL FB

However, in some way, shape or form, even the pure players who operate complementary to Pandora function as fierce competition. Some, like the misleadingly overconfident Beats Music, more than others. As TheStreet's Carlton Wilkinson explained last year, Beats will see success ... (pause for effect) ... however, the real question we should be asking is ...

How do they define success?

Most of the, again, pure-play Internet radio companies play the we'll define success when we see it game. They have very imprecise objectives.

Like to scale out subscribers. Good luck with all that.

Or to take the way Pandora serves Internet radio with the Music Genome Project and do it better. Exactly what that means I'm uncertain.

Pandora hit and moved past the $30 level because, slowly but surely, investors began to understand the story.

Pandora's focus on a set of well-defined goals and objectives -- missing from the conversation completely for a long time and, to some extent, still -- explains the ascent. Pandora, particularly the company's former CEO Joe Kennedy, saw radio as ripe for disruption so that's where it, squarely set its sights.

From a product/user experience standpoint, Pandora focuses obsessively -- sometimes even stubbornly -- on redefining traditional radio.

So it operates from pretty much the same premise as broadcast radio, except (and this a big except), given the delivery mechanism, Pandora can provide a personalized experience for each and every listener. This means it can take chances (nurture music discovery) terrestrial radio simply cannot take. When you're doing commercial radio for the masses -- and each member of the masses hears the same song -- you can't veer too far from what works for the average listener.

There's a fact that's crucial to the progression of this conversation -- Pandora has absolutely no faith in the large-scale viability of the subscription model. It has always been and, I think, will pretty much always be, focused on the free model.

There's a simple reason why ...

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 $94.01 -1.20%
GOOG $695.70 0.48%
P $9.28 6.91%
FB $118.06 0.54%
YHOO $37.40 3.90%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs