In 2016, Americans streamed 431 billion songs through on demand platforms like Spotify and Tidal. Truly, we live in the age of physical music’s demise. However, there have been bright moments for some of music’s most industrious startups. Spotify had 50 million subscribers in March 2017, Tidal saw unprecedented growth when it exclusively released Kanye West’s The Life of Pablo in 2016. Streaming giants aside, whatever happened to Pandora Radio? I remember when the Music Genome Project sounded impressive, now it just sounds old, and some readers may not even know what it is.
So in consideration of the above, should Pandora Radio be taking all the help it can get from places like Sirius XM? Yes, it should because Spotify needs competition—as was proven by Tidal’s failure to compete with the Swedish streaming giant.
My roommate and I, in my early college years, would frequently listen to Ravi Shankar radio while we studied and did homework for hours on end. When I was even younger, in high school, Pandora Radio introduced me to bands like Arcade Fire, My Morning Jacket, and Sun Kil Moon. I haven’t listened to some of these stations since 2009, but they taught me how to find music I loved, and how to read the label. I owe a debt of gratitude to the company; it’s completely capable of doing this in 2017 to a new audience, with some dramatic changes to design, business, and marketing. Sadly, the week of June 19 wasn’t as good as investors hoped it would be for Pandora.
This is how it all went down.
Two weeks before, Pandora had a deal on the table from KKR & Co LP for a $150 million worth of investment in the company. Pandora was offered a 30-day period to seek other options and just when it seemed like their time was up, rumors of a Sirius XM Radio investment popped up. Later that week, the deal had come to fruition and XM radio had agreed to invest more than $400 million into the aged internet radio company. Investors were giddy, would there be a buyout? Would this inflate stock prices to a valuable new high? Neither happened and the company floundered. They need to rethink the strategy, invest in next-generation technology capable of propelling them to a better identity.
Something is just missing. Pandora is hemorrhaging brand identity and its stock price reflects this. The week of June 12, 2017, its stock plummeted a massive 18 percent. It seems analysts couldn’t muster the confidence, financially speaking. This should really worry Pandora! They have fallen so far. At one point, they were the go-to platform for online music. Now they’ve got to do something or they will be left behind—permanently. One thing investors can probably express concern about was Pandora’s choice to sell Ticketfly. From a consumer standpoint, that sort of interaction seems shady. I’ve never bought Ticketfly tickets, and I’ve been to hundreds of concerts so it’s no loss for the vision of Pandora that I imagine—but I can see why it may have made investors a little weary. Ticket sales = fast money. Right?
What about other services competing from a more modern platform? In March of 2016, several media outlets attempted to salvage an intriguing Tidal’s reputation by insinuating the service had reached over 1 million subscribers. Jay Z, Tidal’s owner, stated shortly thereafter that the company’s original owners (Schibsted ASA) had inflated the subscription numbers at the time of his purchasing of Tidal. This was not the only blunder Tidal faced as Mr. Carter took the helm.
Despite Tidal’s relative success they just haven’t really been able to engagingly compete with Spotify either. Pandora could capitalize on missed opportunities like this by boasting ethical superiority. The drama around Jay Z’s struggle to turn the company into a profitable, exclusivity machine combined with the high subscription price doesn’t leave much to be desired here. It seems to me like they simply swooped in like vultures to advertise Prince’s music after his tragic passing. Kanye quickly made his record available everywhere else. Then, of course, there’s memories of the cringe-worthy opening ceremony complete with Daft Punk (it was weird). Pandora has only good vibes in its history, not to mention nostalgic millennials like yours truly.
So Tidal has had some drama and a shaky start, despite (allegedly) reactivating old accounts to get the streaming service sold, it cannot be denied they are a powerhouse with thousands upon thousands of users—maybe millions. It still doesn’t even come close to the Swedish goliath Spotify. I’m using it as I write this, so are 143 of my friends, right now, today globally millions of songs will be listened to through the service. Someone needs to step up with a solid brand identity and compete. Pandora can do this with a little help from its friends (and their finances).
So if a merger offer is ever on the table, Pandora should take or strongly consider it. With its robust brand history and interest from investors like XM, it could be heading somewhere innovative, and we shouldn’t abandon it just yet. The first name in internet radio could still find allies and form like Voltron becoming a true competitor to Spotify or at least half of the name in a potentially top-notch streaming platform. Plus, Pandora XM is an amazing name for it.