Spotify vs. Pandora

2533 WordsNov 28, 201211 Pages
In the 21st century a battle over how music is delivered has begun. No longer is terrestrial radio the only way in which listeners can discover new music, revisit nostalgic favorites and connect with their respective age groups. Online digital radio outlets have become obvious replacements for men and women between the ages of 18-34. In this day and age individuals have a surplus of options when it comes to accessing music. However, many have moved away from physical products and the technologies/outlets of times past. There are two prominent companies waging this war: Spotify and Pandora. "Competition between the two programs seemed inevitable. And now, Spotify has announced a new radio station option, in effect, co-opting Pandora's…show more content…
With Spotify penning licensing deals with these three majors, Spotify has an upper hand on Pandora. "Spotify recently launched twelve new apps backed by the major labels. Pandora lacks such deals, as do many other services. Because of this, Pandora pays a hefty sum in royalties-a significant strike against its business model" �. Due to the absence of deals with the major record labels that Spotify has, Pandora not only struggles with expanding its music library but also with maintaining a feasible monetary system. "Pandora operates annually at a loss of millions due to complicated digital streaming rights and bandwidth costs. If the service cannot combat the Spotify horde swatting at its crown, Pandora will find itself permanently dethroned" �. The next question is obvious: what will Pandora do to combat the increasing strength of Spotify and their listener base? According to Forbes, Pandora has started to venture into automotive territory. "Starting early last year, Pandora has been making deals with manufacturers Ford and BMW, and partnered with Pioneer for access to Toyota, Hyundai and GM. According to the Trefis team writing for the Street, "This is going to be a major avenue of growth given that almost half of the radio listening happens in automobiles"" �. This strategy for Pandora may help to create a little extra wiggle room when it comes to separating the two digital radio giants. However, the tremendous
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