Pandora Absolutely Must Do Better Now

NEW YORK ( TheStreet) -- While I generally believe Pandora ( P) receives a raw deal in the media, from the music industrial complex and, to a lesser extent, the court of public opinion, areas exist where the company not only can, but absolutely must do better.

Believe it or not, I have been a frequent critic of Pandora.

Late last year, I came out against co-founder Tim Westergren's blog post that detailed how much the company pays individual artists in royalties. I tend to agree with the sentiment Westergren expressed, however he picked the wrong time and approach to make his case. For better or worse, it's difficult to overcome the music industrial complex's talking point that Pandora wants artists to take a pay cut. As such, we need more action, fewer words from Pandora.

More recently, I questioned the company's pace and effort vis-a-vis local/indie music promotion in I Can't Find Pandora's Name Anywhere in Hollywood and Does Pandora Do Enough to Promote Local Music?

I have long criticized Pandora's indifference toward selling its subscription option. Turns out I was on the money. After Pandora instituted a 40-hour per month mobile listening cap, subscribers and the attendant revenue soared at unprecedented clips. Subscriptions could, absolutely should and hopefully will become a larger part of the business going forward.

So, make no mistake, I recognize the critical juncture Pandora is at. While I don't agree with the meat of his take, Mark Rogowsky at Forbes makes a point Pandora investors and, more importantly, the company cannot ignore:
The problem for Pandora is that while it can boast of 70 million monthly users, it's a company without any friends. And after years of building a wildly popular service (albeit an unprofitable one), it hasn't gotten any better at making them. The radio-station gambit was typical Pandora. It was having a dispute with ASCAP, which is the Pepsi to BMI's Coke, and decided that it could circumvent the argument -- and pay millions less to boot -- so long as it owned a terrestrial radio station anywhere in the country. Apparently, it concluded this a while ago and was simply waiting for the right time and place to throw this sucker punch.

Now I can nitpick that excerpt. For example, it's never a good idea to go with absolutes such as "it's a company without any friends." Untrue. While there's no question Pandora continues to make enemies, it has friends. Plenty of them. And we can't ignore nuance. More love-hate relationships exist than out-and-out ugly breakups.

Pandora has friends (or "frenimies") at the record labels and elsewhere in the music industry. Pandora Premieres is the latest example of cooperation between "the two sides." And plenty of artists absolutely love Pandora -- despite what music industry propaganda would have us believe. I communicate with some of the smaller ones regularly. I know of a major act who was this close to headlining a Pandora Presents concert series about a year or so ago.

But just because Rogowsky and I do not agree on that and much of anything else, I do not discount the Pandora has no friends theme. Absolutes aside, it's true that Pandora's tactics leave a bad taste in plenty of people's mouths. Pandora might be 100% correct on every issue, but that doesn't matter because perception, for better or worse, equals reality.

Kill 'em with kindness, not lawsuits. Be aggressive (buy an FM radio station, it's all good), but cool the talk and step up other actions that deal squarely and directly with the core problem: The broken system of paying artists the music industrial complex insists on keeping alive.

That's all I care about. Not the success or failure of Pandora, per se, but a.) the health of the overall industry as we move to a digital access model of consumption and b.) a fair shake for the thousands of independent acts and working musicians cast off by the cartel of record labels, concert promoters and so-called artist advocacy organizations.

Certainly, I want Pandora to succeed. I think it will. But that's not my crusade. Pandora will succeed not simply by winning in court and/or Congress, but by proving beyond a shadow of a doubt that it's the absolute best partner the entire music industry -- at all levels, in all aspects -- and artists -- of all types -- could ever hope for.

That's certainly not Apple's ( AAPL) goal and no other Internet radio player has the scale necessary to make the same size impact Pandora has made and will continue to make.

Now, to the company's credit, it doesn't allow outside forces or external pressure to accelerate its strategy. Pandora remains focused with the tunnel vision of a great and confident startup.

I know it has plans. In fact, the product Billboard reported on last month that will allow artists to access Pandora spin data is in its infancy. As Pandora rolls this and other efforts like it out, the value of the service it provides as a partner and promoter becomes more clear.

That said, Pandora can move faster without sacrificing quality and sound execution. It can and it should. In conjunction with its more aggressive moves, it needs to do these other things faster and better.

The Pandora Presents concert series really isn't a series. It needs to become a weekly occurrence across the nation. Not just something that pops up from time to time in Hollywood or during SXSW in Austin. There's no reason for it not to.

Pandora needs to do a better job finding, reaching out to, playing and promoting local and independent artists. The value proposition isn't in the royalties these musicians receive from airtime -- they never have been and likely never will be anything close to lucrative -- it's from the exposure and promotional capabilities Pandora can cut loose with its treasure trove of data.

As I have started covering this space closely, I have had loads of Indie artists and labels make contact. And, the truth of the matter is, when I search for their music I often do not find it on Pandora. I'm more likely to get it on Spotify or in the iTune Store.

Look up the excellent singer/songwriter Andy Richards (new record due this summer; 2010's "And Richards" is excellent and on Amazon.com). But he's not on Pandora.

Check out Freefall Rescue. An LA band with a new EP, "Rise," out now on iTunes. They're on Pandora now, but only because I helped them navigate a system they don't seem to completely understand. Nobody else is lending a hand.

I know Pandora's curation team works extremely hard, but, fair or not, it needs to work harder. It's not that it has to find Andy Richards or Freefall Rescue to make Pandora a better consumer proposition. That's not so.

The idea of Spotify having 10 million songs and Pandora "only" having one million gets overplayed, at least from a consumer standpoint. That said, it matters materially for struggling musicians and if Pandora wants to extend its brand as a place for the discovery and promotion of all types of music, particularly indie stuff.

Think about it ... discovery should work both ways. If I discover an artist through means other than Pandora -- like I did Andy Richards and Freefall Rescue -- shouldn't I be able to find that artist -- and just as important -- other artists like them by searching for them on Pandora?

Again, that's overblown when you consider the facts -- when a user searches for an artist or song on Pandora they rarely come up empty handed. Only about 1% of the time (maybe less) do searches on Pandora come up without results. (When this happens, Pandora's team tracks down the music and, many times, ends up adding it). But, again, that's not the point. The point is Pandora absolutely must own the market on being the best partner across the board, especially to the bands the cartel could care less about.

That means spending more money on raising awareness. Ads in the right places that instruct bands on how to get their music on Pandora. Programs that help those bands take the next step to becoming part of an expanded and more consistent Pandora Presents effort or something of the sort. (And there absolutely must be more "somethings of the sorts!").

Pandora has a team of musicologists (music analysts) who analyze songs all day, every day for the Music Genome Project. They make it far and away the best discovery/recommendation engine in existence. There's no comparison to the volume and veracity of the data that drives how Pandora can promote music and provide the best listener experience in Internet radio.

The effort must be just as strong in these other areas I discuss.

If this happens, Pandora will organically develop a larger and more vocal army of friends. This will naturally decrease the emphasis on the royalty sideshow and shift it to the more important issues much of the music industrial complex's old guard prefers everybody ignores.

-- 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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