NEW YORK (TheStreet) -- Three things got me thinking even more than I normally do about Pandora (P), Internet radio and the dystopia that is the music industrial complex. By the end of this article, I hope to show how these three things relate to one another.
This tweet from Pandora's former Chief Technical Officer Tom Conrad:
After 10 years, I've moved on from Pandora. The company is in incredible hands & there are amazing things to come. pic.twitter.com/cjdROMxutnTom Conrad (@tconrad) June 9, 2014
This excerpt from Tuesday's What Becomes of Pandora If It Doesn't Get Bought Out:
If Pandora really wanted to do these things (see full article at the link) -- and, via ultimately hollow words, it says it does -- it would realize that it's better off being part of a larger company. Just like the people at Beats Music realize they're better off being part of Apple. Just like the people at Twitter should realize they would be better off as part of Facebook (FB). It's much easier to execute righteous, not very profitable, but cash-intensive missions when you're subsidized by bigger, more financially sound companies.
A Wednesday report from Digital Music News claiming the major record labels are pushing for a Spotify sale where this stood out:
... sources also noted that Spotify's investors are also getting more antsy for a sale, and pushing the agenda towards and initial public offering (IPO), acquisition, or other "liquidity event".
We can logically tie these three things together on Page Two ...
But first, you need some background on Conrad and Pandora co-founder and former Chief Strategy Officer Tim Westergren. You can find it in Pandora Cries Poor As Executives Get Filthy Rich. That article details how Conrad and Westergren lavish themselves in stock options while, at the same time, making the case that Pandora is poor as a company because it pays too much for content.
And that's the thing -- whether you're a Spotify investor "getting more antsy for a sale" or Conrad saying goodbye (sniffle, sniffle) on Twitter or Westergren becoming Pandora's former Chief Strategy Officer, the skin you have in the game differs greatly from the stakeholders who are not about to be or are not already financially secure as a result of their role in the Internet radio meets the music industrial complex mess. As such, Spotify investors and filthy rich Pandora executives are -- putting it kindly -- disingenuous at best when they act as if they give a damn about the plight of your garden variety singer or songwriter. No matter their roots, they can't possibly empathize. As such, they approach the questions that vex the broad industry differently or, for all intents and purposes, not at all.
If the record labels cared, they would buy Spotify, not try to louse their way out of their equity stake. They would have acted long ago to take ownership of the distribution, sales, marketing and all data-related aspects of their business. But, when you're a fat and happy, decision-making record label executive playing out your career, why you would bother taking a chance on something that breaks the mold that made you rich? These guys would rather sign Bruce Springsteen to a contract he never should have received than fix an old, antiquated and broken model.
If Pandora cared, it would sell itself. The excerpt I pulled about Pandora coming to the recognition it would be better off as part of a larger company deserves its long-form treatment. Because it's a fascinating subject to explore.
Pandora claims it wants to do more to superserve artists and unlock the doors to its massive firehose of data, but it can't ... it can't because it's constrained by content costs. So, in a twist of irony, Pandora proceeds to fight -- in the most aggressive and vicious ways it can -- the content creators. As it fights, it does not act in the best interest of partnership with singers and songwriters. It only further alienates these folks and makes the musicians who actually like Pandora question the company's motives.
If you're Pandora and you want to do the right thing by artists, why not drop what is proving to be an impossible fight and follow the the Beats Music model -- not with respect to curation, but in terms of swallowing your pride, setting aside your ego and embracing the notion of becoming part of a larger company that has the resources to help your business reach its maximum potential?
But, in a world where guys like Conrad and Westergren can get rich while crying poor and investors can push for an IPO so they can get paid (regardless of whether or not Spotify is ready for an IPO and would be a sound investment for common shareholders), that type of rationality doesn't prevail.
In the eyes of guys like Conrad and Westergren, they "helped build Pandora" therefore they have already contributed their gift to the world. In fact, as fate would have it, they are the gift for having given the world Pandora. And they got paid so handsomely for it they're more than willing to ride off into the sunset -- retiring and relinquishing roles -- providing carte blanche for the B-team to continue shortchanging musicians rather than work on truly connecting them with their fans.
If Pandora really cared Conrad wouldn't stop at being a multi-millionaire. Westergren wouldn't go incognito and hire an even more elusive CEO. And the labels would want to control, not divest from Spotify. But when money talks, nothing truly righteous has a chance to walk. And, as usual, that's bad for the music industry, particularly the members who don't profit handsomely from it. Here's hoping Apple (AAPL) and Beats will actually save the day.
--Written by Rocco Pendola in Santa Monica, Calif.