Pandora Media (P) is the undisputed champ in the growing realm of streaming music. It served up more than 5 billion hours of content in its latest quarter, and more than 75 million people rely on the platform in any given month for their listening pleasure.

Pandora isn't perfect. The stock is trading 30% below its March highs, and the future may offer some challenges. Let's go over some of the things that may trip Pandora up in the coming months, knowing full well that the bulls will be rewarded if it's able to turn these threats into opportunities. 

1. Tech giants want a say in this market
Apple (AAPL 0.64%) and Google (GOOG 1.25%) (GOOGL 1.27%) have made it clear that they want some more skin in digital music. Apple did so when it rolled out the Pandora-like iTunes Radio late last year, and this year it acquired the Spotify-like Beats Music platform as part of its $3 billion deal for headphone maker Beats.

Google may not be making as much noise as Apple here. Its Google Play Music All Access premium on demand streaming service doesn't seem to be gaining a lot of traction. Google isn't shouting metrics from the rooftops on usage the way that Apple has in the past with iTunes Radio. Its digital music purchase -- Songza -- was reportedly far smaller than Apple's deal for Beats Music. However, Google has been vocal about rolling out a music subscription service tied to YouTube, the world's most popular video site. Getting folks to pay will be a challenge for Google, but we can't discount the potential of the global leader in online advertising to be disruptive if it eventually rolls out an ad-supported model that would challenge the way most consumers enjoy Pandora.

2. Pandora's popularity may have peaked
Pandora's big, but the problem is that it was bigger a few months ago. We don't have to guess. Pandora has told us so. 

  • Pandora had 76.4 million active listeners in June, less than the 77 million active listeners it was serving in May. Bulls may argue that seasonality can be a factor as students and adults disconnect over the summer, but in fact there was a sequential increase between May and June in 2012 and 2013. 
  • Pandora served up an impressive 5.04 billion hours of content during the quarter, but if we break it down by month we see that it delivered 1.7 billion hours in April, 1.73 billion hours in May, and just 1.61 billion hours for June. The extra day in May helps pad that month's numbers, but not enough to explain the entire sequential slide in June. On a per-day basis, usage peaked in April.
  • Pandora also tells us -- or at least used to tell us -- its share of the total U.S. radio listening market. It was 9.28% in April, 9.13% in May and 8.9% in June.

Pandora is no longer providing these monthly metrics. We'll have to get by on quarterly performance announcements from here. It will need to prove that it didn't peak in April and May.  

3. Music royalties can make this an unprofitable model
One of the bigger challenges of running a streaming business is paying for the streams. Labels, songwriters, and musical artists want to get paid. This is a pretty big deal for Pandora, where more than 95% of its users are freeloaders, accepting ads for the right to stream tunes.

The good news for Pandora shareholders is that its ad revenue is growing faster than its usage. In other words, it's milking more money out of its advertising rates. However, investors will want to keep an eye on any changes in music royalties and fees that will make it more prohibitive to succeed.

Right now, Pandora is succeeding. You don't get to 76.4 million active users on a pace to consume 20 billion hours of content on an annual basis merely by being at the right place at the right time. However, there are enough potential traps that investors will want to make sure Pandora avoids in the coming months.