Tuesday, June 21, 2011
Without Panic, Pandora Peters Out – for Now. Can It Revive? Can It...Make Money?
This is an ad for Pandora, the online radio service. Part of its appeal, its money-making business model, has been selling advertising. I get that, looking at the page by Discover Marketing. But I ask you: isn’t radio, no matter how enjoyable or cleverly wrought, ancient history, biz-wise?
Although I’m no bleeding-edge visionary I could never figure out how Pandora was going to make money. Mike Damon of Damon Medical Communications suggested I try Pandora originally even as I told him, I’m not a music guy. “Free radio online” didn’t have the stink of revolutionary.
I read about Pandora’s music genome project – understood how it was supposed to work. Cool stuff, it is true; adventuresome. But how do you build a business model on that?
I couldn’t see the big money. Couldn’t make out the shared-user-experience excitement and participation that have driven other dot.com business models to success. For me, one ad-guy lesson is, beware of geeks bearing gifts.
Is there anyone in this spiral arm of the Milky Way who does not know now that the Pandora Media IPO cratered? (You can say, “Sure, I knew that!” and still sneak off here to give yourself some background.) As the SeekingAlpha.com post points out, there was a visible difference between the sizzle and the steak, especially when investors see cautionary statements revealing accumulated deficits of $92 million bucks.
So what has this got to do with marketing and advertising? Even with the best will in the world, I have found Pandora’s marketing and supporting advertising non-compelling.
In dot-com bubblicious days, the curiosity of geek-founders was hugely rewarded; so were the risk-taking investors of those days. Advertising and promotion, trade shows and PR all contributed to the hype. (We did, we did.) The bubble’s eventual collapse disappeared a lot of ad agencies, jobs and nest eggs.
Of the two different punishments at work in this month’s Pandora Media story, one is hubris – how can any team of entrepreneurs bring such a money-losing offering to market? Who the gods would destroy, etc.
But the leading-edge company whose stock symbol is P is by not yet destroyed. We need for it to reverse its course and succeed, even if it takes a few years. Because, as the author of The Last Olympian has the Titan Prometheus say:
Pandora always gets the blame. She is punished for being curious. The gods would have you believe that this is the lesson: mankind should not explore. They should not ask questions. They should do what they are told.
We need to keep that curiosity in the world. The marketplace will reward the venturesome and the challenging. Maybe all Pandora needs is a better business model. Plus adverts that don’t put you to sleep.