Since Spotify remains private, we can't compare revenues and profits between Pandora and its Swedish rival. What we do know is that on-demand streaming from companies like Spotify has likely surpassed Pandora's brand of online radio as the dominant streaming platform globally. However, as on-demand services like Spotify have added radio functions, it doesn't necessarily follow that this would be the case. It could be that Pandora's licensing deals with the larger record labels, forbade Pandora from adding an on-demand option. Although potentially hampered by its closely guarded licensing agreements, Pandora missed the rise of what has become the most significant driver of growth in the music industry, and it isn't immediately clear why this now-glaring oversight came to pass. That Pandora never added on-demand functionality to its product remains a head-scratcher on a grand scale in my eyes. However, as it built out what has today become the most dominant Internet radio platform in the U.S., Pandora's management also made a cardinal sin of omission that could threaten the company's long-term trajectory. Powered by its "Music Genome Project," the algorithmic tagging technology that matches similar songs for users' stations, the service exploded in the 2000s, culminating with its successful IPO in 2011. To be sure, Pandora has certainly thrived in many regards since its early inception. The firm was founded in January 2000, the very turn of the millennium, a full 18 months before illegal download site Napster shuttered its service and a calendar year before iTunes launched. Sin of omission: Pandora missed on-demandįor those that haven't followed its evolution extensively, to say Pandora was the first mover in the now-booming streaming music space would be an understatement in the extreme. However, in stepping back even further, a recent revelation struck me that speaks to the just how badly things have played out for Pandora. I've discussed Pandora at length in recent years, often voicing a somewhat skeptical stance that the company could ever effectively scale its cost-laden business model.
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