Pandora: Crazy Stock, but Focused, Practically Unbeatable Company
While I was there I had casual chats with a number of different people from the company. I wish everyone had this opportunity. It would instantly clear up quite a bit of investor concern over Pandora's short- and long-term future. This is a sharp, smart and well-run company in perpetual startup mode; seizing its massive opportunity in radio, lndie concert promotion and mobile advertising requires an aggressive, startup mindset.
Allow me to riff a few key points I have basically been making all along, but feel even more confident about after spending more time at Pandora.
One: No matter the fate of the current royalty battle on Capitol Hill, Pandora has a Plan B .
This is not a passive company. It's a focused one. Focused on its core mission -- to build the premier personalized radio experience.
Two: There's a sense you feel when you talk to Pandora employees, including management, that all of the competitive encroachments on its turf -- rumored or real -- validate not only Pandora's success, but its ability to lead the Internet radio space going forward.
People from Pandora have expressed this sentiment publicly; but when it's conveyed in person, the company's shared focus and vision resonates. These guys hit the right note -- they're not overconfident, they respect partners and competitors (particularly Apple (AAPL) , who is both), but they're certainly not about to fall victim to obstacles they've overcome dozens of times along their rapid, un-stunted growth trajectory.
Not one soul at Pandora loses sleep over Apple doing something (that might end up looking more like Spotify anyway . . . let's call it iTunes finally packed with 21st Century features).
But, even if Apple streams music exactly the way Pandora does, there's no guarantee it will do much, if anything, to steal market share. It takes quite a bit of time and money -- money Apple has little reason to invest -- to scale that business to anywhere near Pandora's level.
One thing critics lose sight of -- in both the royalty and competition discussions -- is that Pandora has more leverage than it's commonly given credit for. It's responsible for a growing share of airplay, particularly of artists who receive no traditional airplay, and digital music sales via platforms such as iTunes. It also ranks, consistently, as one of the most downloaded and top-grossing iOS apps.
Everything everybody has done or is rumored to be doing in streaming is a knock-off on Westergren's brainchild -- The Music Genome Project. No challenge to date, including from terrestrial radio giant Clear Channel and its iHeart Radio , has come close in terms of audience size or nailing personalization.