Let me say from the outset that I am a thorough fan of Pandora and its browser-based and iPhone-friendly offerings. Both work exceptionally well. (Most of the time, anyway. Music recommendation isn’t a perfect science - with or without a so-called Genome Project involved in the process.) Yet the Washington Post has featured an exposé by Peter Whoriskey this weekend to the effect that Pandora, save for a swift change in royalty fees stipulated for Internet music Selling-Entertainment-Online Jan-08 playback by SoundExchange, the representative for a number of studios in the industry, will soon be facing a “pull-the-plug kind of decision.” So says the founder of the service, Tim Westergren.
That, I hold no reservations in saying, would be (all but) tragic. Pandora has added considerable value to the custom radio market, and its arrangements with mobile phone carriers and home theater Home cinema systems by Slim Devices (Sqeezebox) and Sonos are quite elegant methods for casual listening sans a PC.
Yet, I feel I must beg the question: Is the royalty system all that gives Pandora and the people behind it the kind of finite outlook they predict as a result of drastically increased licensing costs? Might it not be at least partly due to the competition’s much more expansive implementation of social services intertwined with music streaming and recommendation that targets Pandora for expiration? Is it, when all is said and done, an algorithm, or a set of algorithms, that music fans wish for? Or is it interactive, person-to-person frameworks by which to share and learn of favorite artists and new releases they crave more? Popular names like Last.fm and imeem are readily serving to such demand quite well.
For the time being, Pandora seems quite healthy, I’ll allow. Google shows that the last 12 months for the site have generally moved upward from a low of 200,000 visitors per day in July 2008 to 400k by July 2008. It then witnessed a surge to about 450k in the days immediately after. But a service like imeem, for instance, which carries quite a few social networking components in addition to its media-rich archives, has a sort of all-in-oneness to it, and Google marks it as having had 400k visitors in July 2007 turn to 800k a year later.
Similarly, Last.fm is also a popular destination for social music entertainment. Its name is well enmeshed in the market. Mind you, it is early neck-and-neck with Pandora, user-wise, so it would be silly to think it’s anything of an outstanding financial success. But in terms of assets, I would venture to peg Last.fm as a more promising wager going into 2009 and beyond. (Just for reference, Google Trends shows Last.fm as having experienced ups and downs over the last four seasons, but it has often maintained a rough 400k daily visitors.)
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