Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Meet the Next So-Called Pandora Killer

Another bad day for the music industry? YouTube is preparing to pull tracks that can't also exist on its premium music streaming service. Credit: Warner Music.

Add Google (NASDAQ: GOOGL  ) (NASDAQ: GOOG  ) to the list wanting to muscle in on Pandora Media (NYSE: P  ) and Spotify for a share of the streaming music business.

"We're adding subscription-based features for music on YouTube to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year," a YouTube spokesperson told Billboard, which reported the news.

Sound impressive? Possibly, but there's also a hitch. According to Billboard, YouTube has failed to reach an accord on royalty rates with a number of the leading independent labels. In those cases, YouTube plans to pull free-to-listen tracks that wouldn't also be available in the premium service. 

What to watch for if you're a Pandora investor ...
How users will react to a muted edition of YouTube music isn't entirely clear. In the meantime, Pandora and Spotify are left to figure out how to compete with yet another a new entrant that will grow stronger over time. YouTube is simply too big, and Google flush with too much cash, to not figure out a deal.

There's also history to consider. Unlike, whose Prime Music is also a new player, YouTube has spent years acting as a sort of digital mixtape service for cheapskates like me. (Here's my admittedly limited and silly "epic movie and TV themes" playlist, if you're so inclined.)

Still others, such as South Korean rapper PSY and Justin Bieber, have found fame after posting their music to YouTube. To this day, major labels earn millions in revenue from ads attached to music videos posted at the site. A premium service was all but inevitable.

What should Pandora investors watch for as YouTube stakes its claim? Two things, I think. Continued gains in listening hours per month among its user base, and ongoing gains in revenue per 1,000 listening hours. Those are the metrics that tell us whether Pandora is engaging with its listeners and worth the premium investors are paying.

Now it's your turn to weigh in. Do you think YouTube's premium music service has a chance of disrupting Pandora? What about Spotify? Leave your take in the comments box below.

Leaked: This coming consumer device can change everything
Imagine the multibillion-dollar sales potential behind a product that can revolutionize the way the world shops and interacts with its favorite brands every day. Now picture one small, under-the-radar company at the epicenter of this revolution that makes this all possible. And its stock price has nearly an unlimited runway ahead for early, in-the-know investors. To be one of them and hop aboard this stock before it takes off, just click here.  

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 27, 2014, at 11:06 AM, garygarame wrote:


Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3005256, ~/Articles/ArticleHandler.aspx, 9/5/2015 3:49:49 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

Today's Market

updated 6 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 4:03 PM
P $17.99 Down -0.14 -0.77%
Pandora Media CAPS Rating: *
GOOG $600.70 Down -5.55 -0.92%
Google (C shares) CAPS Rating: ****
GOOGL $628.96 Down -8.09 -1.27%
Google (A shares) CAPS Rating: ****