Internet music service Pandora doesn't try to guess what you like -- it knows what you love. One of my friends is penning eloquent paeans to Pandora's amazing audiophile superpowers on a fairly regular basis lately, and still others evangelize it. Its uncanny savvy, and the fervent customer love it seems to inspire, opens a box of trouble for Sirius XM
Traditionally, corporate radio companies tried to tell you what you liked. At its inception, Sirius XM's major competitive advantage was its promise to give listeners what they wanted again, with a wide selection of eclectic, genre-based stations.
Down here on Earth, Apple's
Then along came streaming radio service Pandora, which now might menace both satellite radio and Apple's iTunes. Its Music Genome Project analyzes music according to your tastes, and offers up suggestions of other artists you'll probably adore as well. In short, it's free mind-reader radio.
Pandora recently broke the 60-million-listener mark, powered in part by a surge of new users on smartphone devices like Apple's iPhone, Research in Motion's
Word now has it venture capitalist firm Elevation Partners has been investing in such new-school social media plays as Facebook, Yelp, and now, yes, Pandora. Elevation Partners arguably knows music; U2's Bono is a managing director. Pandora is a serious contender, and it looks like a threat to Sirius to me. (I'm not the first Fool to pose this question.)
Sirius XM has its share of challenges, including a nasty economic climate in which consumers may cut subscriptions for discretionary entertainment in favor of cheaper or free options on the Internet. Sirius also staggers under a mind-blowing $3.03 billion debt load, and the sluggish economy won't help partners such as Ford
For Sirius XM, this Pandora's box of competitive threats is all too real.
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