The Edge That Will Send Pandora Past $30

NEW YORK (TheStreet) -- It's not going to happen today ... but I expect Pandora's (P) next leg to be up featuring a move past $30.

We have exited stage one of investor and smart generalist denial. During this misguided era, the mere mention of a Pandora killer sent shares plummeting. Now, no matter what happens -- new Internet radio combatants or a secondary stock offering -- the stock doesn't do much more than ebb and flow.

However, we're now in stage two of Pandora denial.

Thanks to Apple's ( AAPL) iTunes Radio presence, the investor as well the smart generalist remains hesitant to fully and unconditionally endorse Pandora.

Given the company's superiority (and technological head start) as a personalized radio and music discovery platform, there's no way even fine products from Apple, Rdio and others can touch Pandora.

Here's an anecdotal specimen:

Yes, that might be anecdote, but I reckon it's an experience a considerable number of Internet radio listeners have been having, in one way, shape or form, independent of one another.

Another anecdote: Over the weekend, my daughter was happy to find "The Voice Radio" on iTunes Radio. When that ran its course, she turned to a straightforward iTunes Radio stream, where she proceeded to skip, skip and skip again. That's something she never does with, say, "One Direction Radio" on Pandora.

Why? I partially explain it in the video. I'll further illustrate what I'm saying here.

Take a look at these screen captures from Rdio, Clear Channel's ( CCMO) iHeart Radio and Apple's iTunes Radio.

Rdio

iHeart Radio

iTunes Radio

Notice that each service provides a little slider that allows the users to dictate what amounts to the veracity of music discovery. From none or very little to aggressive and, presumably, relatively obscure.

One company, Echo Nest, powers that type of discovery. When you see that slider, chances are you're using an Echo Nest-powered platform. I know Rdio and iHeart use Echo Nest. I suspect iTunes Radio does, but it's difficult to know when Apple refuses to respond to requests for interviews with its iTunes Radio team (assuming one even exists).

Echo Nest isn't horrible. But, relative to the otherworldliness of Pandora's Music Genome Project, it, in operation, isn't all that great either.

My anecdote, which I assume is more than just anecdote, speaks to the edge Pandora has over its competitors as well as why it's able to not just withstand, but grow in the face of Apple. (I should note, however, that Apple isn't dabbling in streaming to compete with or kill the third top grossing app in its App Store. Pandora, as a beloved feature of iPhone and iPad users, is more valuable -- from a brand standpoint -- than iTunes Radio probably is at this point).

Quality of experience matters.

While many of us use various Internet radio services, we use different ones with different intents.

For instance, you know what you want to hear, you use Rdio. You start off with stuff you own, you use Apple. You want to hear live radio from another market, you go to iHeart. You want personalized radio and discovery, you go to Pandora.

As an aside, which I will explore in a future article, the aforementioned names, specifically Rdio and iHeart, should stick to their bread and butter. But there's a reason why they lack the focus Pandora and, to a different extent, Apple have. (That's called a tease ... Check my article history at TheStreet and YouTube Channel for this referenced and other forthcoming articles and videos).

This nuanced edge the Music Genome Project provides Pandora matters, not only to listeners, but, just as importantly, to advertisers. Remember who many of the people are who buy time directly or for agency clients on Pandora. They're people who have been buying traditional radio for quite some time. On the other side, many of Pandora's salespeople sold traditional radio for years before Pandora poached them.

Don't overlook what the Music Genome Project does for Pandora. It's the engine that drives all Pandora is, can be and ultimately will be. It will also continue to be the underlying driver that sends shares higher.

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

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

More from Opinion

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Amazon's Assault on Grocery Stores Will Have a Profound Impact on Many

Amazon's Assault on Grocery Stores Will Have a Profound Impact on Many

It's Dumb to Think There Aren't Already Monopolies in Big Tech

It's Dumb to Think There Aren't Already Monopolies in Big Tech

Google's EU Battles Are Hardly a Reason to Panic

Google's EU Battles Are Hardly a Reason to Panic