This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Haters Have Reason to Trash Pandora

Stocks in this article: P TWTR

NEW YORK (TheStreet) -- On the back of its core business model, Pandora (P) stock could continue to climb. Because there are no two ways about it, a winning narrative underlies the Pandora story. For the most part, this has not changed.

That said, I can't, in good conscience, refrain from urging caution with respect to Pandora's lack of action regarding data. Neglecting this part of the story now would be akin to me having gone with the crowd when Pandora wallowed in the single digits. It never pays -- financially or intellectually -- to go with the crowd, particularly on Wall Street, because, more often than not, analysts operate with rearview mirror genius.

So, on to updating my initial (above-linked) treatment of the matter with the latest ...

It's nothing short of a sin that the head of Twitter (TWTR) Music, Bob Moczydlowsky, talks his book on big data as it relates to the music industry to Billboard while Pandora remains, for all intents and purposes, absent from the conversation:

We're developing a data set specific to music ... There's a ton of new information and conversations about music that we have never let out of the building before. Some of that data have to do with timing or geography ... It has the potential to help the (music) industry figure out how to best invest in artists or how to direct their marketing campaigns.

Whereas Twitter Music appears to have failed thus far, the larger Twitter platform contains, as Moczydlowsky put it, "a fire hose of data" that can show the industry tech companies can not only be their friends, but the key to driving an era of unprecedented prosperity in the "record" business.

But, for whatever reason, data -- unless it helps the company sell advertising -- is not a priority at Pandora. Pandora appears to have no problem using its data to draw a crowd at advertiser-backed events. However, it's curiously hesitant to unlock the mine to not only self serve, but benefit the greater musical good. 

Though it was not his intended message, Pandora CTO Tom Conrad told us, albeit implicitly, that data is not a priority at Pandora in an excellent piece at First Round Capital's Web site.

Conrad discusses how Pandora prioritizes what it will do from a product standpoint. He describes an environment where everybody contributes ideas that go up on the wall. From there, the company decides what needs to get done now. The rest falls by the wayside; it simply wasn't meaningful enough to take up scarce resources.

It makes no sense that data continues to hit the cutting room floor. And it makes it difficult for me to continue to support Pandora in the royalty fight.

It's not because I think Pandora doesn't pay enough to license music. Cats who bash Pandora with the they don't pay out enough to musicians line miss the point.

The argument they should be making is the one I attempt to drive home as I raise this issue here at TheStreet.

OK great, Pandora feels as if it's treated unfairly vis-a-vis royalties when compared to broadcast radio or Sirius/XM (SIRI) satellite radio. It argues that it provides exposure and airplay for artists of all sizes they simply did not have prior to Internet radio's emergence. And, further, Pandora claims it can use its own "fire hose of data" to help artists, including unknowns, smaller acts and indies.

As I explain here, Pandora Chief Strategy Officer and co-founder Tim Westergren has been talking about the power of Pandora's data since, like yeah, 2008. But he has yet to make it a priority ... to harness it for the benefit of brands, bands and the larger music industry at any meaningful scale we can see.

Show us, don't tell us.

That should be the music industrial complex's message to Pandora. Not the standard, you're not paying us enough. That's short-sighted crap. It ignores the value Pandora, led by Westergren, continues to (for some reason) hold back.

If I'm at a label or other big-time music industry entity, I'm telling Pandora that I'm more than willing to lay down my arms on the royalty front when and only when, if and only if Pandora does the right thing with its data.

And that's, throughout the organization, make it a priority.

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

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks. Rocco Pendola is a columnist for TheStreet. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs