The Absolute Worst Media Coverage of Pandora

NEW YORK (TheStreet) -- I understand what hacks such as myself are up against. It's impossible to talk to every founder or executive you write about. Quite a few refuse to talk. Many who do say very little. And, even if it management makes itself accessible, it's just not possible to interface with everybody.

That said, there's no excuse for the horrible reporting and opinion-making most of the media churns out vis-a-via Pandora ( P).

Consider what Jim Edwards wrote over the weekend at Business Insider:

There are two ways to think about Pandora.

The first is the way most people are familiar with (and the way founder Tim Westergren wants you to think about it): That it's an enormously popular music streaming service with millions of users and a huge mobile ad business.

Thanks to Twitter follower -- @Murphy_Danny -- for tipping me off to Edwards' piece.

In the first part, we get an unfortunate surface scratch: There are two ways to think about Pandora. Yep. Water everything down to simple dichotomy. It's more complicated than that. A five-minute conversation with Pandora's receptionist might reveal as much.

How does Edwards know "the way" Westergren wants you to think about the company he founded? And how does he know there isn't more than one way?

He doesn't. Yet that hasn't stopped him from writing thin articles on Pandora for as long as I have been reading.

He conceded on Twitter that, when it comes down to it, he put words in Westergren's mouth.

The guy could have, at the very least, cited an article where Westergren actually says what Edwards assumes Westergren wants public perception of Pandora to be. Or, better yet, call or email him and ask, In what way do you want people to perceive Pandora? After reading Edwards' article, that's what I did (see Page Two for Westergren's response).

But, like I said, you can't talk to everybody so, please, speculate. I do it all of the time. I live in a glass house, no doubt, but it has a view. I throw stones, yet I aim. So it's all good -- spew uninformed opinions, just don't put words in the founder's mouth to feebly support an ultimately lame non-argument.

Tim Westergren put himself in a difficult spot. No doubt. For anybody who thinks I'm a Pandora shill, read what I wrote in Absolutely Horrible News For Pandora.

In one respect, I overreacted in that piece, at least if you measure such things using today's stock price. Since that article hit on Nov. 16, 2012, Pandora stock has increased 53%. That said, even though I'm bullish heading into earnings (which should come in late February), Pandora will crash again. Always does. This stock moves on noise and swing trader whims.

While this royalty situation is a big deal, people act like there's no Plan B. That if Congress doesn't level the playing field and set a sane content acquisition cost structure for Internet radio, Pandora goes out of business. Enough of the simple dichotomies.

Just as you can't think of Amazon.com ( AMZN) as a near-term profit and margin story, you have to take a deeper, more theoretical approach to what Pandora is as a service and ultimately is and will evolve into as a business.

That's what Westergren has always done in public appearances as well as communications I have had with him. I emailed him to double-check over the weekend. He replied:

You have it right. We hope people think of us as great radio. Easy to use, but totally personalized. Distinctively great for discovery and a platform for mass exposure for working musicians.

It's the MGP Music Genome Project that allows us to deliver on this. Ideally designed to handle the most obscure music because it doesn't require popularity data. A truly level playing field.

Pretty straightforward.

So, after a wholly-uninformed case study in fallacious reasoning, Edwards goes out in style, explaining that "if it wanted to," Pandora could turn a profit. Then, another dichotomy -- Edwards blames the absence of consistent profit on the commissions Pandora pays its salespeople or marketing costs as it scales out its business. Throttle back spending or, presumably, stop paying sales commissions (?) and, bingo, there's your profit.

Heavy sigh.

If Westergren decided to halt free food and water for his staff, moved the company headquarters to North Dakota and stopped paying employee health care premiums, Pandora might turn a profit as well.

Investors should be happy that Westergren -- and the rest of Pandora's management team -- operates in the real world. That's a world where things don't happen overnight and long-term vision and opportunity trumps short-term and not only poorly, but barely-researched media noise.

How's this for a deal?

Enough barking about problems. In a two- to three-part series of articles to hit over the next few weeks, I will address major points of contention -- Pandora and profitability, Plan B if Pandora does not get a sweet royalty deal -- in this battleground. It's one of the most intense -- outside of stocks such as Apple ( AAPL) and Netflix ( NFLX) I have ever followed.

Follow me on Twitter (link below) so you know when my articles hit.

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

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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