Apple and Beats: Another Pandora and Spotify 'Killer'?
If you don't know Beats, TheStreet's Carlton Wilkinson tells you much of what you need to know about Dr. Dre's company , including its music service ambitions.
Truth be told. Few people have even a semblance of a clue of who will do what when and how they will do it. Moreover, almost all of the speculation takes a pathetically myopic view of the Internet radio landscape.
Thankfully, the stories I cite here -- from TheStreet's Chris Ciaccia and Billboard -- do no take the "crush" and "kill" Pandora and Spotify angle, but over the last year that has become the go-to line, particularly among uninformed and hysterical members of the financial media and Wall Street analyst "community."
Consider some key thoughts and points:
We really have no idea who's talking to who and about what.
My best guess on Apple: Those now old iRadio rumors; they're probably the same as this Beats rumor. It's probably safe to say that Tim Cook met with some music industry people in Los Angeles recently.
Spotify and Pandora have significant differences. Spotify negotiates music licensing deals directly with labels. Pandora, by and large, pays as per the rates set for Internet radio by the Copyright Royalty Board. Try both services and you'll see -- they're distinct from one another. Spotify is more like iTunes (or it is everything iTunes should be). Pandora is a more like radio, but it's IP-delivered with fewer commercials, more variety and optimal personalization.
But Spotify and Pandora do compete. No doubt. They both exist in the audio entertainment space. When you're listening to Pandora, you're not using Spotify. When you're using iTunes or Slacker or Songza, you're not using Pandora or Spotify (in most instances).
Room exists for many Spotifys and Pandoras. Think about it. Pandora disrupted radio. As such you have to view what a "radio station" is much differently than you did just a couple of years ago. Throw out the traditional sense of what you know a radio station to be. Pandora changed that definition. In fact, soon cars will come off of assembly lines without AM/FM radio installed!
With that in mind, view Pandora as a radio station, Spotify as a radio station, even iTunes or YouTube as radio stations. You flip between each on the basis of preference and/or whatever motivates you in the moment. That's what I do. The same as when I listened exclusively to terrestrial radio, moving between music formats and different types of talk formats.
In this new space of disrupted, IP-delivered radio, Pandora, in terms of revenue generation via advertising, has first-mover advantage. (Put an asterisk next to that because of Google's model; however, in terms of securing traditional radio ad buys from agencies and local businesses, Pandora, for all intents and purposes, stands alone among the Web-only players). Agencies looking to buy radio spots can now see Pandora's ratings side-by-side with terrestrial radio's ratings, as noted by Bloomberg. Given that Pandora is already the top station in several major markets, this could be a game changer.