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The Amazon Way at Pandora

Stocks in this article: P AMZN

NEW YORK (TheStreet) -- Earlier this week on TheStreet in Twitter's Beating Pandora At What Should Be Its Own Game and Wall Must Demand Answers From Pandora ... Now, I discussed the Pandora (P) issue everybody should be, but nobody is talking about -- data.

But that's OK.

When I was busy writing about the stellar advertising business Pandora was building (and continues to build), there was scant discussion of it from others. Or it was doubted and downplayed. Now, that ad business has a real chance at driving $1 billion in sales, or close to it, for Pandora in 2014 (I don't care about the guidance Pandora gave).

This company is on fire and nothing other than itself can stop it.

The word "data" only came up, in some form, seven times during Pandora's earnings conference call. Unfortunately, none of the mentions dealt with what I discuss in the two above-linked articles.

The only reference to "data" worth texting home about dropped in this exchange between an analyst and Pandora CEO Brian McAndrews:

Heath Terry, Goldman Sachs: Brian, can you give us a sense, when you look at the opportunity at Pandora and particularly when you were coming on ... how did you think about where Pandora's advertising technology sat, how much of an opportunity that represented, and what your initial priorities were in terms of leveraging the data there?
McAndrews: ... And I think leveraging data, we're beginning to do that already. We target in over 100 different ways, different combinations of variables that we have ...
Right now, with zipcode, we have great location data, but over time, companies will look more at geolocation, and thats an area we can look at over time ...
So I think there's a lot of headroom there. These things take a while, but again, weve been making investments and continue to make investments to take advantage of those kinds of things.

If you've been reading me the last few years, you realize this is 2012, 2013 stuff. We already know all of this.

So, again, a Wall Street analyst asks a worthless question. What else is new?

What analysts should be asking is when will we see Pandora use its data in a meaningful way to do things other than targeted advertising. Of course, that business will continue grow and evolve into something more precise and sophisticated. That's exciting, however it's still Pandora 101.

What the company needs to do is turn big data into a revenue line separate from subscriptions and advertising. Everybody from bands to brands to record labels would pay handsomely for historical and real-time access to Pandora data.

I need to articulate, in practical terms, what this might look like as to illustrate the massiveness and urgency of the opportunity for Pandora. I'm on vacation next week so I'll be doing a lot of thinking about how I can best relay my thoughts and where Pandora might be headed with data (outside of targeted advertising).

With that in mind, we look elsewhere. For now. Specifically at the inspiration for the headline of this article. Nothing I have heard on an earnings call has ever excited me as much as this did ... 

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