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Pandora Finally Knows It Needs to Be More Than a Radio Player

Welcome to the great consolidation. Those with the deep pockets are playing for high stakes, and they don’t care about what’s playing in your bedroom; the only thing that matters is the boardroom.

In an era where Spotify is valued at a greater number than Live Nation, it only makes sense that if Pandora is going to buy Ticketfly, it also grabs Rdio, which was doomed to fail because its market share was too small. In tech, you play the long game, something the music industry gave up on in the ’70s. You spend until you’ve got enough users and market share to turn on the spigot and make money.

Some say Rdio’s interface was the best. But that’d be like arguing for Beta instead of VHS. Critical mass is more important than quality. The average punter couldn’t tell the difference between Beta and VHS, even though the former was technically better; all they knew was the latter was cheaper and was what everybody else was using.

YouTube and Spotify freemium are cheaper than Rdio — and Rhapsody and Apple Music, too. And most people will pay … but not yet. Like I said, it’s a long game, something Tim Westergren and those who run Pandora, a radio service that operates in only a few territories, hadn’t realized for too long. Westergren got his audience to agitate for low streaming rates so the company could continue, and the result is the artists have been screwed; radio pays differently than on-demand. But now that Spotify and Apple have radio as well as playlists, Pandora had to make a move.

“In tech, you play the long game, something the music industry gave up on in the ’70s.”
@lefsetz

Pandora has got to go to on-demand. But their launch is gonna be too late, and they’re not willing to lose money on freemium, and therefore I’m not betting on Westergren & Co.  But at least we’ve got a horse race. The winner will have 70%-plus market share. Yet Amazon (not Apple) is the sleeping giant here. Not that Jeff Bezos always wins, but at least he understands the game. Music is a feature — a way to get people in the door.

Once again, the music business is more interesting than the music itself. Because everybody making it wants to be a tech titan, or have the riches thereof.

Yet it doesn’t have to be that way. The power does lie with the musicians, if only they had some self-respect and realized they possess the juice that powers the whole enterprise. Create hits, build an audience, and not only will you get rich, you will dictate.

Which brings us to Adele.

The artists railing against streaming applaud Adele’s success after keeping “25” from Spotify, et al. They just don’t know it’s the last gasp of a dying paradigm and the birth of a new one. We won’t see albums released in the fourth quarter for sales impact anymore, but we will see the most popular acts dominate the chart.

Today’s acts want hope. And if Adele can play by the old rules and win, by golly, so can they! But she and her superstar brethren are hoovering up all the profits in music. You think Adele holding her album back from streaming services is a victory for you, but the truth is it’s a victory only for her. And all the hype about her potentially breaking sales records is more important than the sales themselves. They give her the imprimatur of importance. So judging Adele’s success as a poke in the eye to streaming services is delusional. Yes, she made all that money. It’s just funny that she left all that cash on the table the last time around.

So put your music on streaming services, which not only dominate today, but as we’ve said before — are in it for the long run.

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