Pandora Voted “Most Likely to Collapse” by Top Analyst…

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Seems like Pandora is doing just find when it comes to adding listeners and brushing back competitors like iTunes Radio.  But Wall Street smells blood: against a raft of missed expectations and profitability concerns, shares of P have plunged nearly 50% since March.

According to The Street analyst Rocco Pendola, this could get a whole lot bloodier before the year ends.   “Take it from the guy who was bullish Pandora stock at eight bucks a share and then bearish at $36 — Pandora’s at its most vulnerable right now,” Pendola noted this week.

“And it’s well within the realm of possibility that the company collapses under its own stubborn and short-sighted weight in 2014 or thereabouts.”

Part of the problem is advertising, or rather, way too much advertising.  That has always dragged down traditional radio stations, but Pendola argues that Pandora is now overloading its service with endless takeovers and interruptions.   “Pandora might argue that it has no choice but to saturate the masses with advertising,” Pendola argues.  “It has to increase revenue. And it must find a way to keep ahead of content costs.”  

“That’s what Pandora always comes back to.  It’s the poor victim — as its executives get filthy rich — of royalties so it has no choice but to do things to offset this injustice.”

Pandora is now fighting an all-out war with content owners, which makes it highly unlikely that royalty costs will ease.  But why isn’t Pandora pursuing other revenue streams, whether premium subscriptions or selling data?  “The other guys are not standing still whereas, outside of its advertising efforts, Pandora absolutely is,” Pendola continued.   “This state of affairs might not have mattered six months, one year or two years ago. But it does now.”

“Pandora’s arrogance will catch up with it.”


21 Responses

    • Anonymous

      or ask, why aren’t Pandora and Spotify publicly addressing and working to combat AD FUNDED PIRACY with the MAJOR LABELS as it is the cause of the downward pressure on these businesses that devalues advertising revenues, music value and the ability to grow a paid subscription base.

      The downstream economics from zero don’t get better… These streaming companies along with the labels need to work together to address the number one problem effecting all revenue models for monetizing recorded music – AD FUNDED PIRACY is a mortal threat to not just artists, musicians and labels but also the streaming services themselves.

  1. Anonymous


    Great one word summary of that company.

    In the few e-mail exchanges I’ve had with people at Pandora, that is EXACTLY what I’ve gotten in return.

  2. TuneHunter

    Hey Pandora,
    Time to knock on the labels door!
    Your licensors are ignorant , negligent actually suicidal.

    The legislative winnows in Washington and Brussels will close soon. So please tell your label friends if they do not want to rot at the lowest deck of Goole pirate boat the have to change “fair use doctrine” and w lock music inside of viral walls.

    Pandora will be able to provide subscription free pleasure and will become $5B music store with Shazam, Soundhound and few others as awash registers of the industry.

  3. Helen

    Given his biography, I am somewhat uncertain what makes the cited analyst qualified with regards to financial analysis of a company.

    • PTSoundHound

      Was just about to post the same thing; a career radio show host is hardly the person I’d go to for business analysis.

      Besides, when he says “collapse” it seems he’s not talking about the company ceasing trading, he’s talking about a stock price collapse and recommends Apple buy the company out. Hardly the “we’ve seen the last of Pandora” as the article alludes to – more of a “expect Pandora to come back with a new logo and more money behind it than you can shake a stick at”.

  4. jw

    I agree with him that Pandora could do more with it’s data… advertise smarter, rather than just advertise more. But it’s total hyperbole to suggest that they’ll collapse in the next 8 months. I mean… that’s just ridiculous. Pandora isn’t vulnerable the way that terrestrial radio was because there isn’t a viable alternative. Users flocked to Pandora because it was a better product than terrestrial radio… Pandora could advertise just like terrestrial & it’s still better programming, it’s not like users are going to go back to terrestrial where there’s just as much advertising & limited programming. That doesn’t make any sense. iTunes radio would have to be a viable competitor for Pandora to be in danger, & we all know that it’s not (in spite of your attempts to make it seem so, Paul).

    Pandora is really going to grab market share from terrestrial when it’s fully integrated into every automobile. They just started getting real market penetration in 2013… what percentage of Americans drive a 2013 or newer automobile? 5 years from now, that picture is going to look entirely different. When listening to Pandora is just as natural as tuning into terrestrial radio, Pandora’s usage is going to increase dramatically. iTunes Radio is never going to be available in cars except through an iPhone. Because Apple is a hardware company, there will always be a service that is willing to adapt to any hardware & that service will be #1 & right now that’s Pandora with no competition. Supporting a range of different hardware is essential in this category, & Apple’s primary goal is always going to be to sell it’s own hardware.

    The stock fluctuation is incidental… what does Wall Street really know about these things? For every “analyst” who is bearish on P, someone else is bullish. I don’t own it or even use the service, but I say right now is the best time since September to get in, though I wouldn’t be surprised if it dipped back below $20 in the short term.

    • Jeff Robinson

      “I agree with him that Pandora could do more with it’s data”

      Maybe, but what Pandora could do that seems to be the norm on the commercial side is charge labels for airplay. Certainly that would off-set the costs of having to pay the writers and performers and copyright holders of the material.

      Perhaps that would be their final ignorant move.

      In commercial radio, the programming is the ad-base. Which pays better, the Top 100 market price to get a song played or a :30 second ad in that same Top 100 market? IF Pandora is running more ads, it is because they are not charging enough for the ads. I have no idea what the normal price is these days for an ad on a service like that. I know Spotify wanted $5000 for a month of spins of a commercial.

      Another solution for Pandora is to get away from millions of individual, unique streams. Start programming with a ‘viewpoint’ and offer a ‘sound’ that is not pseudo-music genome-artificial-intelligence computer-generated shit. Less channels equals less royalties due at the end of the month.

      • jw

        Supposing (for the sake of argument) that the average radio play goes out to something like 50,000 listeners, a single Pandora ad should only need to generate 1/50,000th of the revenue. Since we know that Pandora is paying songwriters 10:1 versus terrestrial radio (after adjusting for scale), & then paying performers 12-14x that (when terrestrial radio pays nothing), it’s safe to assume that 50,000 Pandora ads are outgrossing the average terrestrial ad by a longshot.

        I don’t know why they’re running more ads, but I don’t think you’re onto anything.

    • Anonymous

      Streaming digital will never be close to terestrial radio for the dine fact that unlimited data plans are a thing of the past. Let’s be real there are few people who will pay to stream that much data in their automobile it’s just not affordable.

  5. R.P.

    duh. i said that over 2 years ago, on here, during the Spotify bashing days… oh wait, dmn still bashes spotify… but yea.

    • GGG

      You said Pandora was going to collapse soon, 2 years ago?

  6. Willis

    Don’t these “top analysts” have anything better to do?

  7. FarePlay

    Now, I know some will find this dated thinking, but Pandora’s discovery model can mesh with, dare I say, paid downloads. The tracks are already on their server. Perhaps with the decline in paid download sales, now is the time to renegotiate those deals.

    Perhaps, this is the point in time to reduce those costs and extend the life of paid downloads. In the indie world Pandora could direct fans to the proprietary indie band, indie label sites for Vinyl / CD sales / fulfillment and take a piece of those sales without owning inventory or handling fulfillment.

  8. RCG

    Remember, the first four letters in “analyst” are ANAL. Certainly applies here.

  9. Randy

    Seems to me that there are a lot of jealous executives and peoplewho dont like the fact rhat this is one of. the few companies ob the net that still offers a g ood service for free. Whymust everything be about the almighty Dollar. Are you scared your not going to get your 2 cent royalty fees. If you are then wha wha wha. The general public doesnt care about you getting rich. All they care about

  10. Randy

    You cant post on here because someone has let loose a bug on hete. Why does it always have to be about money. Why cant you accept the fact that some things should be free.

  11. Gary

    Switch over to free, non-intrusive radio. Less advertising, more music choices.