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Pandora Not Happy With Criticism As 'Regular Radio' Lives Again

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OTOH, Pandora refuses to extend itself beyond the two aforementioned areas that brought it to the dance. As I wrote Tuesday:

Pandora's diving head first into dangerous territory. It's increasing its spot load and finding new ways to put advertising in front of its users. You know -- it's doing one of the very same things that's a big negative for traditional radio. On its own that might not be a bad thing, but consider some color ...
If Pandora was a nimble company with a handle on the trajectory of Internet radio and the music industry it would expand its horizons to grow revenue beyond advertising. It would not compromise and sacrifice the user experience with more advertising; instead it would -- as I have been banging on for months -- build a data business.

Meantime ...

... traditional radio's doing what it can to evolve. It's moving beyond its comfort zone of simply selling commercials ...

That's why I can drive in my car -- like I was Wednesday -- and listen to a Cumulus-owned sports radio station out of Dallas via Clear Channel's iHeart Radio app and hear a promotional commercial for streaming radio service Rdio. If I sat in front of anybody, let alone a broadcast radio executive, two years ago and predicted that would happen in less than two years they would have told me I was insane. It's quite incredible to watch regular radio operate in anything but regular fashion. What we're seeing from Clear Channel and Cumulus is pretty much unprecedented.

You have Cumulus stations streaming via a Clear Channel platformYou have Cumulus and Rdio already in and ready to expand a dynamic partnership. It's almost as if the regular radio companies and the pure-play Internet radio guys willing to partner are saying something like ... We need to ensure that people can access our content so let's do some interesting things and get it out there. We'll iron out issues over sharing revenue and such as we go. Maybe that is exactly what they're saying. I don't know. But I do know I love the product of their collaboration ... a collaboration that's only in its infancy.

Meantime, Pandora maintains an us against them attitude that'll do them about zero good going forward. Name one meaningful Pandora partnership with another company in its broad space. You can't. Because they don't exist. Even though they could. And if they did, they would be spectacular (e.g., Ticketfly). 

Instead of rolling out data products that could benefit musicians and record labels, Pandora drags its feet. Breaking the promise Tim Westergren made when he spoke of touring heat maps as early as 2008. Pandora would rather fight the royalty fight in court than show the music industry what an excellent partner they can be -- thanks to data -- royalties aside.

Instead of using their data to do something other than sell advertising, Pandora's standing still while other companies turn data into a new revenue line. Regular radio's out in front with respect to using data to not only "make a case for the value of their audience," but become a more dynamic and "valuable marketing platform for advertisers and media planners."

Pandora continues to chip away at broadcast radio's $14 billion (or so) advertising market. Again -- not a bad strategy. It has worked well so far. But growth will moderate as Pandora seeks a larger share of that pie. The company needs to be open to not only maximizing the power of its historical and real-time data for the music industry and brands, but broadening the content it offers listeners. 

Spotify. Rdio. Clear Channel. Cumulus. They're already here. They're going to keep coming. And they're no longer screwing around. Pandora's tunnel vision was fine in 2011, 2012 and 2013, but for 2014 and beyond it's the equivalent of a once vibrant tech company stuck static and underestimating its competition with its head in the sand.

Pandora's dead set on executing a strategy we've seen before. It's actually becoming less of a technology company and more of a radio company. That's boring to investors and it's going to prove boring to listeners. It's also the height of arrogance and irony. Incredibly, the radio companies -- seemingly out of nowhere -- are starting to talk and walk more like technology companies. That makes them better partners to the music industry and, increasingly, more interesting alternatives for listeners than a Pandora that's preoccupied with how to get more ads in front of users who have unlimited options for listening to music and related content. 

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

Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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