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TheStreet Open House

Exposing a Pandora Article That Reads Like a Press Release

Stocks in this article: P

This excerpt from the article is a line Pandora has been trotting for at least a year now with respect to its inaction on data:

Ironically enough, Pandora's been planning on building these audience-engagement capabilities for a while now, but they haven't had the resources due to royalty fees, which eat into half of Pandora's revenues. But once artists are empowered to engage with their audiences, making a living as musician sounds a lot more sustainable.

I'm here to tell you that that's crap.

Pandora has had the Artist Dashboard built for at least 6-7 months, probably longer. I know because I saw it. In person. And it has been viewed, on a limited basis, by artists who visit Pandora's Oakland headquarters to play a show for company employees. To be able to get to Pandora and play -- and see your data -- let's just say that's a luxury. Plus, it's not like anybody can just show up. Pandora has to approve you. 

In my view, Pandora sits on or refuses to build out products such as the Artist Dashboard because it's using its data and musicians as pawns in its battle with the music industry over royalties. And that's really a damn shame when you think about it.

Pandora has no problem adopting the Amazon.com (AMZN) way by reinvesting in its advertising business. It has no problem adding entire floors to its Oakland HQ or moving into more expansive digs in the nation's most expensive real estate market -- Manhattan. It has no problem granting stock options and minting millionaires in its executive suite. Yet it's going to continue to tell us that financial constraints brought on by content costs prevent it from doing anything with data, on a large and/or meaningful scale, to benefit musicians.

Please. Don't insult our collective intelligence.

Pandora continues to play what amounts to a game of extortion with not only the music industry, but the struggling musicians Westergren has been purporting to want to save since 2008. We've heard the same line from these guys on this front for so long it has become pathetic.

What does this mean for the stock? I'm not sure. However, I think it illustrates a larger phenomenon I'm observing at Pandora. The company's becoming way too corporate. And that's scary.

Somebody who's decently connected emailed me Wednesday morning and said something to the effect of I remember when it felt like Tim and Dom (Pandora's VP of Finance and Investor Relations, Dominic Paschel) were running the company.

Buddy those days are gone. And I don't think Pandora ends up better off for it.

You have recent hires from places ranging from Visa (V) to Yahoo! (YHOO). And this changing of the guard (which includes Westergren, for some reason, no longer acting as Chief Strategy Officer) is killing the invigorating startup culture I once considered a Pandora trademark. In place of that, we have an increasing number of businesspeople running a business. That might be reality, but it's cold. And it sucks. And it shows. 

While that might be good for the stock price today, it's not good for the company in the long run. I reckon Wednesday's Fast Company shill piece -- an article anybody with an ounce of knowledge about Pandora could see right through -- serves as a harbinger for a company caught up in a royalty fight that has become part pissing contest, part chess game with singers and songwriters shamefully caught in the middle.

--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.
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