Why Pandora Trounces Apple's iTunes Radio

NEW YORK (TheStreet) -- In recent articles, I have highlighted the Music Genome Project (MGP) as one of Pandora's (P) insurmountable edges over the competition. Even Apple's (AAPL) iTunes Radio.

I get into it a bit in the video that accompanies the article at this link. I get into it a bit more in Crucial Facts You Should Know About Apple Vs. Pandora. And I get into it a whole lot more in Why Pandora Blows Apple's iTunes Radio Away.

Here, I lay it out with the type of on-the-ground examples that happen, to some extent, every time Pandora plays a song for you. At the same time, however, the inner-workings of the MGP run pretty much behind the scenes. That's cool for the user, who, ultimately, wants to kick back, listen to the radio and hear/discover good music.

But, smart generalists and investors must appreciate the power of the MGP if they desire a better understanding of why Pandora will not only survive, but thrive alongside iTunes Radio.

The other day I was driving in my car. Pandora served up a song I know I never heard before from a band I had never heard of.

 

Turns out Ween has the quite the reputation, particularly in Jersey. The Ween tune Pandora played for me was so in line with my musical tastes I immediately thumbed it up. That night, I looked up Ween on Rdio.

As a not-so-aside, notice the complementary nature of the services. Discovery on Pandora. Give me more, on-demand, via Rdio. If I ended up liking Ween, I would have, at the very least, listened more. For still active bands, I might have bought a ticket to a show or something. Someday the music industrial complex will fully embrace and exploit this trajectory.

Anyhow, upon further inspection, I couldn't find another song from Ween that did anything for me. I sampled as much as I could and, to a tune, they were all, in my humbly subjective opinion, pretty bad. (Though a couple other tracks from the LP "White Pepper" could make the cut. A few have a very Oasis/Beatles sound to them).

Pursuant to this experience, it's no surprise that since it played Falling Out for me, Pandora has not served me any more Ween. That's because it didn't serve me Ween in the first place because of some seemingly obvious pop culture or music genre association. It served me that one song because, musicologically, it made sense given my listening history.

This screen capture isn't from the Ween song; it's from another, but, it doesn't matter, it's a representative example and nicely illustrates the complexity and nuance of the MGP.

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I have seen the guts of the MGP. When Pandora says there are many more attributes, they mean it. Down to the last bit of musicological minutiae, Pandoras music analysts classify songs. Then the algorithm, with some human oversight and input, takes all of this data and places each song in Pandora's library on a spectrum. Put simply, the distance between songs determines where they end up on yours and Pandora's various stations.

Nobody else in Internet radio even comes close. Not even Apple. In fact, most -- and, though Apple has yet to confirm, I think they are among "most" -- use EchoNest, a relatively generic music recommendation system employed by platforms such as Rdio and Clear Channel's iHeart Radio. That's simply not enough and never will be enough to crush, kill or otherwise meaningfully harm Pandora. 

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

Rocco Pendola is a columnist for TheStreet. 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.

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