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Sell Pandora: It's About to Become a Thing of the Past

You can't just halfway embrace the Amazon way. If you do, then, for all intents and purposes, you're not actually embracing the Amazon way.

For Pandora to largely reinvest its resources -- and, possibly, forsake some profit -- in just one part of its business (targeted advertising) would be like Amazon setting aside Amazon Web Services and/or only aggressively building out one or two parts of its wide-ranging e-commerce ecosystem.

I'm not saying Pandora should just jump willy nilly into a million areas. Not at all. Amazon doesn't do that.

Lately Amazon has gone balls to the wall on fulfillment centers, streaming content and hardware to drive e-commerce, while moving with more caution on grocery delivery (it's only available, as Amazon Fresh, in the Seattle and Los Angeles areas). But, in areas where the meat's already on the table, you don't see Amazon hesitate. It wastes no time conquering and taking ownership of opportunity.

With respect to data, the time is now. But Pandora just doesn't seem to understand that there's a world in data that lies beyond what is the company's present-day bread and butter. When I question Pandora about its lack of initiative on data, I'm told, Yeah, but, we're doing lots with data with respect to advertising.

That view shows a fundamental misunderstanding of where things are, where things are headed and the massive opportunity for Pandora to assume a leadership role. It runs the risk of turning Pandora into an Internet Radio relic. 

Because ...

It's Not About Music or Radio, It's About Data

I wish I would have screen captured it the other day, but, when I was scrolling through my Facebook (FB) mobile newsfeed, an advertisement popped up for Beats Music.

It focused on the notion that Beats reigns superior because, I think it was, 300 "music professionals" curate it playlists. Beats seems to think people -- on a mass, mainstream scale -- actually care about this. Recent research suggests otherwise.

Listeners lay back. And this is one reason why they like Pandora. Because Pandora has developed the ultimate lay-back music listening experience. As I explain in the above-linked article, you have the option to interact with Pandora. And when you do that's when the Pandora's real business kicks in. The business of data. Don't get me wrong, Pandora needs to be good at determining what to play. And it absolutely is. Way better than Beats in fact

But, ultimately, it's not about radio. It's not about music. These things put the puck in the slot, but it's the data that will put it in the net with authority.

Pandora has proven this by using its data to create what's turning into an advertising powerhouse. The company will, probably in the next year or two, bill $1 billion in advertising sales. It can accomplish this because of the way it uses data. But the thing is, Pandora has merely scratched the service on what it can do with data.

However, it's going to grow more slowly as an overall business if it doesn't take things to the next level.

The advertising business can operate on something that resembles autopilot. As Pandora expands its sales infrastructure, it's basically replicating and building on what it has already accomplished. The model's in place, now it just needs more feet on the ground and additional creative ways to make and keep the sale distinct from what everybody else, particularly Pandora's main target, broadcast radio, can offer.

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