Why Pandora Will be Dead by 2018…

Does anyone think Pandora or other internet radio businesses will be around in five years? They’re already struggling and with iTunes Radio on the horizon things won’t be getting any better.

Apple can foot the bill, they can afford to overpay if it drives more iPad sales. They can even afford to share low-rent advertising revenues and make this a break-even iTunes feature. Sort of like the iTunes Store.

Pandora, on the other hand, remains committed to living on advertising and a small amount of subscription revenue. This isn’t a loss leader for anything else, it’s all about monetizing internet radio directly. And that’s difficult, especially for a company that remains heavily-resistant to a paid subscription model, or anything else that lowers their massive audience numbers.

Which means, the entire Pandora model is dependent on some government handout to survive.

“Pandora Is Trying To Get Uncle Sam To Lower Artists Wages”


It is not a valid argument for the government or a company to take rights and revenue from the artist under the guise that the cost of music stifles innovation or profits or that “they are paying less so we should too”. How can artists innovate, create and thrive if they are not being paid a fee that they agree is fair compensation for their work? (How wonderful life would be if things worked like this: You see something you want but think the owner is selling it at too high a price, so you ask the government to force the other person to sell it a lower price.)

Ownership is great. Access is great. I want both.

Read Damon Krukowski’s “Making Sense” for some perspective on Pandora and Spotify:

Consider Pandora and Spotify, the streaming music services that are becoming ever more integrated into our daily listening habits. My BMI royalty check arrived recently, reporting songwriting earnings from the first quarter of 2012, and I was glad to see that our music is being listened to via these services. Galaxie 500’s “Tugboat”, for example, was played 7,800 times on Pandora that quarter, for which its three songwriters were paid a collective total of 21 cents, or seven cents each. Spotify pays better: For the 5,960 times “Tugboat” was played there, Galaxie 500’s songwriters went collectively into triple digits: $1.05 (35 cents each).

This is why I still buy albums on iTunes. If I like an album I want to own it and give compensation to the artist. And the best, easiest way to do that is still by buying the album. Ad-supported music services don’t do this so well. My belief is that these other services are unsustainable.

I always find it odd when I hear ads on Spotify telling me to listen to more music on Spotify. We can make an educated guess that the company is already losing money – that’s why it just took $100 million from Goldman Sachs and $10 million from Coke. So how do ads saying “hey, use Spotify more!” make any sense? It must be they’re trying to annoy you enough with ads to get you to switch to a paid subscription.

What’s even weirder is when I hear ads for things like Bonobos. I’ve always wondered how effective those ads are. If you’re listening to a good song over Spotify you’ll probably be receptive to paying 99¢ to buy it. But no – let’s see if they want pants.

Apple is supposedly going to come out with a Pandora-like music service in which you get radio-type music playback powered right from the iTunes Music store. My guess is that it won’t have advertising. I think it’ll have a button that you click to add the currently playing track right into your music collection for 99¢.

Isn’t that a way better model than hoping someone clicks an ad for something completely unrelated to music?

“Why are all these techies so delusional? “

Bob Lefsetz on Pandora’s latest appeal to have their licensing fees reduced.

Why are all these techies so delusional?

Yes, the music industry has been too slow to license.

Yes, it tends to extract its pound of flesh.

But your way into copyright holders’ hearts is by proving you’re going to make them more money. And that’s not what Tim Westergren is doing here, he’s just lobbying on behalf of his shareholders.

iTunes should use the Music Genome Project to determine Genius Recommendations

With my criticism about iTunes Genius it seems to make perfect sense, at least to me, that Apple should use the Music Genome project as the source for Genius playlists and recommendations.

Which may be odd, considering I’ve been down on Pandora before, but there’s a big difference here between Pandora and Last.fm. Pandora and iTunes Genius have the same goal of giving you music that sounds similar to another track that you already know. When I use last.fm I’m not looking for that – I’m looking for something new.

Pandora seems to use a much more in-depth analysis of music to determine what sounds similar to what you’re already listening to – which is exactly what is at the core of iTunes Genius (besides selling your more music). iTunes Genius appears to just look at artists. This article from the New York Times details the incredible amount of data that is collected on each track they analyze.

Plus, I like this part:

He likes to tell a story about a Pandora user who wrote in to complain that he started a station based on the music of Sarah McLachlan, and the service served up a Celine Dion song. “I wrote back and said, ‘Was the music just wrong?’ Because we sometimes have data errors,” he recounts. “He said, ‘Well, no, it was the right sort of thing — but it was Celine Dion.’ I said, ‘Well, was it the set, did it not flow in the set?’ He said, ‘No, it kind of worked — but it’s Celine Dion.’ We had a couple more back-and-forths, and finally his last e-mail to me was: ‘Oh, my God, I like Celine Dion.’ ”

This anecdote almost always gets a laugh. “Pandora,” he pointed out, “doesn’t understand why that’s funny.”

Pandora’s Music Box

Has a friend ever lent you a CD? “Here, take this – you might like it,” they say. So you press play on it and wait to hear what happens.

And you don’t like it. It sounds like nothing you’ve ever heard before. How could your friend be this far off in his recommendations? What does he hear in it?

And then you listen again only to realize its greatness. Your buddy was onto something. If you had dismissed it immediately you would have missed out and, whether you realized it or not, you would have suffered a little bit. Your music world would be poorer.

The same thing happens with movies. Same thing with books. Same thing with a new restaurant in your area. It’s new or different than what you’re used to, and because of that you’re afraid of spending any money or time. You’d rather spend that energy in what you know you like; what’s safe – like a room, or box, you lock yourself into because it has everything you like in it, or so you think.

This is why I find things like Pandora to be such an odd discovery tool for new music. Pandora is that box. When you hand this job over to supposedly complex algorithms it gets the job done, but I get the feeling that something is missing.

Netflix gets that same feeling, which is why they are constantly trying to improve their own recommendations and go to extreme measures to do so. They offer the Netflix Prize. If you can figure out how to make their recommendation system better Netflix will give you monetary compensation around the area of a bajillion dollars.

The obvious thing to do, I guess, is to look at previous ratings, see what other people rated those movies, what they’ve rated other movies, and then mish-mash those results together and hope for a miracle. Of course, it’s more difficult than that; there are fragile, complicated human brains involved here.

Part of the benefit of Pandora is the claim that it’ll only play music you love. But I don’t want that. I want there to be a chance that I may hear something so different from what I’m used to that I have no idea what to make of it. Pandora reminds me of that Twilight Zone episode where the crook goes to what he thinks is Heaven. He thinks its heaven because he keeps winning when he gambles – except after a month of having every desire satisfied he grows bored of it and realizes he’s in Hell.

That’s part of why I prefer Last.FM over Pandora. Pandora is built upon the Music Genome Project, but Last.FM’s is built more around its community. Their Neighborhood radio is so vast that there’s a chance that you might love something or hate it – which keeps the search for new music interesting. If you want something more like Pandora there’s recommendation radio. Last.FM has more options. It seems more organic to me.

When you hand this job over to a recommendation service like this, I get the feeling you make a decision to trap yourself in the box and try to look out, when what you really should be doing is looking in from the outside of that box.