NEW YORK (TheStreet) -- Earlier this year, I argued that with just 0.3% of its cash Apple (AAPL) could put the hurt on Pandora (P). In this article, I review that assertion and introduce another way Apple could not merely hurt, but absolutely devastate Pandora.
While there's no question Pandora blows iTunes Radio away, the superiority of the consumer platform/product doesn't render Apple impotent.
Because, as I explained in February, on a whim Apple could put the hurt on Pandora in one important area:
Apple could, with the greatest of ease, decide to make weekly iTunes Radio-sponsored concert events across the country a hobby. It could put them on in cities throughout the United States (or the world) consistently. It could live stream them. To do 50-100 of these shows annually -- some grand scale with big names, some with indie and unsigned acts at smallish venues -- would cost Apple nothing ...
(Apple could take control of an area that would) ... build/maintain image, keep (its) ecosystem fresh, help hardware sales ... and generate awareness for and use of iTunes Radio that's not going to happen if you merely go head-to-head with Pandora on the merits of the respective services. Because, again, Pandora wins in that regard. Hands down.
However, thanks to a mix of a lack of resources and a lack of will, Pandora has not competed effectively in areas that can a) drive its core business to new heights, b) improve its positioning in the royalty fight and c) open up new and potentially lucrative (relative to its size) lines of revenue.
In the shell of a nut, Apple could steal the live concert space away from Pandora and use it to drive adoption of iTunes Radio. Of course, as this component played itself out, iTunes Radio would continue to get better just like Apple Maps has.The effects of that level of salvo would only ding Pandora; however, if Tim Cook decides to get real, look the bleep out. If I'm Apple -- and I'm serious about iTunes Radio -- I take Draconian actions by effectively declaring thermonuclear war on Pandora.
And here's how I would do it ...
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