But seriously people ... While it doesn't seem as if iTunes Radio has had the slightest impact on Pandora (assuming we can trust the people at NPD Group), Apple (AAPL - Get Report) just made an announcement I reckon could resonate meaningfully.
I first saw this over at The Next Web:
Apple Announces its First iTunes Festival in the US, Five Nights at SXSW
... from March 11-15 it will be hosted at ACL Live at the Moody Theater, in Austin, Texas. And some big names will be in tow too, including Coldplay, Imagine Dragons, Pitbull, Keith Urban and more.
Why do I think this matters?The umbrella reason: In my estimation, even though Pandora clearly doesn't realize it yet, its bread and butter will soon lie outside of its core focus of being radio redefined. It is/will be data. The other is/will be entering the live concert business. Pandora's scale and precision at doing radio makes everything else possible, however, it's in the process of not seizing the opportunity it created for itself in "everything else." Frankly, it has failed miserably in both areas (though it has gotten better over the months with respect to live shows). Everything else could mean everything from additional lines of revenue to some much-needed leverage in the royalty fight. But Pandora refuses to act aggressively (unless acting generates advertising dollars). The fact that Apple is setting up an iTunes Festival at SXSW next month should not be the thing that directly scares Pandora. Granted, it's a big deal. I was at SXSW last year and I don't think Apple was there. If it was, it flew under the radar. Apple is known to simply not show up at these things. And, if it does, there's zero pomp and circumstance. So the fact that Apple will have a major presence at SXSW is big news in and of itself. But the real scary thing is what if Apple, at some level, decides to take on concerts as a hobby? That's where they can truly crush Pandora and can gain much-needed traction for iTunes Radio. And Pandora, unless it acts swiftly (as in now) and aggressively, can do nothing about it. Part of Pandora's advantage over Apple is that, despite the media hype, Apple's just not all that committed to iTunes Radio. How could it be? Why would it be? The revenue it could generate, if it was highly successful, represents a sliver of what it does with its core high-margin hardware business. Plus it's having a tough time selling ads in the first place. That said, Apple could decide that hitting the streets in markets across the U.S. on a consistent basis is fun. (Because it is). And the company could put on, heck, a few shows a week in places such as LA, New York, Nashville and Austin without breaking a sweat or spending half a percent of what's in its war chest. That approach, not the mere and relatively weak presence of iTunes Radio, is what has a legitimate change of killing, crushing or otherwise negatively impacting Pandora. Because Pandora doesn't have the resources or, sadly, seem to have the will to compete appropriately and effectively in areas that will become more and more crucial to its business (and success). Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts