In any three- or four-way battle for the top spot in any market, there will be two clear contenders, and a scrappy brand clinging to number three and hoping to find a way into the top two.
We see it in fast food, in telecom and, of course, in streaming media. There was a time, back when iTunes was still reigning supreme, that Pandora and Spotify were the new kids on the block.
Then, a generation came of age in a world where streaming music was possible, and iTunes became ‘mom and dad’s music’. Amazon and Apple both saw what was happening with streaming music, and they threw huge sums of cash at creating contenders. Those efforts shuffled the deck, leaving consumers essentially choosing between Spotify and Pandora, if they didn’t already have Apple Music or Amazon’s streaming service.
Now there’s a definite leaderboard established. Apple, despite not having the numbers, is growing quickly and has all the money it needs to push back any competition, as well as a built-in consumer market of Apple fans and older consumers who are beginning to trade in their iTunes for Apple Music. Then there’s Spotify, which is about to go public and receive a massive influx of cash to help the company shore up some of its cash-flow issues.
Pandora Left Behind
How did Pandora get left behind? Many industry critics say it was because Pandora was late to the game in offering an ad-free subscription service.
Delaying this realization were a series of leadership shifts, as well as financial trouble and a seeming inability to keep customers from crossing over to the competition. That’s not to say Pandora doesn’t have a strong following. Tens of millions of users still use the free version of the app which is supported by ads.
And, yes, those platforms still allow users to approve a song or artist, so the app can build a ‘station’ around that choice.
Competition Is Real
But the competition has moved on. Both Apple Music and Spotify allow users to pick songs and create personal playlists on their own. That benefit is one key reason why about half of Spotify subscribers pay for their subscription.
Spotify may not be breaking even yet, but they are getting closer, and the IPO could help them along the way. So, what is Pandora going to do to catch up? Turns out, the company plans to diversify by doubling down on the ad-based income streams.
Pandora is investing heavily in an effort to build audio ads for both streaming services and streaming terrestrial radio stations. If you’re wondering whether or not Pandora plans to sell its service, called AdsWizz, to the competition, you’re onto something. That’s certainly part of the game plan.
What’s Next for Pandora
Pandora may have more subscribers than Apple has for its streaming music service as well as the ability to sell tech to Apple and others as well. As good as that sounds for Pandora, critics still say Pandora is setting itself up for obscurity in the streaming world.
In the future, the may be the also-ran that just decided to focus on something else. And, why not? It’s working out great for BlackBerry.