Should Apple buy Pandora?

“Would it make sense for Apple to buy the streaming music and internet radio market leader?” D.M. Martins Research asks for Seeking Alpha. “Pandora is the number one player in internet radio and streaming music. It is hard to think of any other mainstream industry in which the market leader is valued at less than $3 billion, which is the case here.”

“Growing organically has been a surprisingly challenging task for Apple Music, considering the Cupertino company has easy access to the iPhone user base and should theoretically have little problem cross-selling its music service to existing customers,” Martins writes. “But as it turns out, even Spotify has been doing a better job at growing its subscriber base.”

“By adding Pandora’s current 81 million monthly active listeners to its portfolio, Apple would become the undisputed leader in the space. In addition, I don’t consider the current market value of each Pandora active listener ($33, calculated as the company’s market cap divided by total user base) to be too aggressive of a figure,” Martins writes. “Keep in mind that Pandora estimates a Premium customer to have up to $91 in lifetime value and a non-paying user to be worth no less than $21. The acquisition, therefore, might make sense if Apple is able to monetize on the sizable user base effectively.,” Martins writes. “”

Read more in the full article here.

MacDailyNews Take: No.

Apple will buy Pandora for the same reason they bought Palm.

SEE ALSO:
Why Apple should buy Sirius XM and Pandora – December 14, 2016
Largest shareholder urges beleaguered Pandora to sell the company – May 17, 2016
Pandora said to have held talks about selling the company – February 11, 2016
Apple Music takes a huge bite out of Pandora – October 23, 2015

22 Comments

  1. Why? Apple wouldn’t incorporate anything good Pandora might be doing.

    I subscribe to only AM. But I miss Spotify. AM sucks at creating custom radio stations. I have given up on trying. At Spotify, I could manually add and remove songs to custom radio stations, even see the songs I added to the custom radio station. No can do at AM. I could create a custom radio station based on a folder of songs, no can do at AM.

    Yes, I am talk about Spotify and not Pandora. I use to belong to Pandora, then migrated to Spotify. Then moved to AM. I will not leave AM. But I do miss Spotify and I am very frustrated with how AM lets us create custom stations.

    To AM’s credit, I do believe the number of songs available is greater than both Pandora and Spotify.

    I told AM to create a custom radio station based on a Barry White song. WTF, the crap it kept playing was awful. Nothing even remotely like Barry White. Bunch of songs with russian lettering for song titles. I had to keep telling it “I don’t like this song” hoping it would learn to find and play better songs. NOPE.

  2. What’s with all these “Should Apple Buy…” articles cropping up lately? What next, a “Should Apple Buy Greyhound” article about how Apple will equip every Greyhound bus with onboard Macintosh computers that people can use during their trip…on second thought that does sound like a good idea.

  3. Pandora is my favorite free service which I use for my Grace Digital Internet Radio and Apple would end up charging me some premium price for using it. I’ve been using Pandora for years and it’s a shame the company is struggling. I guess I’d be happy if Apple could buy the company just to keep it going. $3B is the same amount Apple paid for Beats, so that amount seems reasonable to me.

  4. Apple already blew $3 billion buying a company that had no assets and no technical abilities that Apple didn’t already have in house.

    So sure, why not flush another few billion down the toilet to chase after more subscription revenue, Cook?

    1. Apple bought the Beats brand. If you don’t like Beats, that’s your prerogative. But Beats is the #1 selling headphones in the world. They are directly associated with music just as much as “iPod+iTunes” was a decade ago.

      And make no mistake, the people that came with that purchase, are driving Apple’s push into content production that Apple could not have done on their own.

      1. #1 selling brand in the world may be important to you, but it is not to anyone who appreciates music fidelity. Beats is an example of hoodwinking consumers with marketing over product excellence.

        There is a reason that great headphone makers don’t sell their products at Walmart, by the way. Yippee that Beats is available on every street corner. That doesn’t make them a superior product.

        As for content production — that’s a money pit that Sony got into as well. If Apple wants to blow billions of dollars on producing new content, then that’s its prerogative. It is a distraction to Apple’s core businesses, as proven by the fact that Apple still reports it all under the “Other” bucket in its SEC statements.

        In the world of audio, you can have top sales or you can have top quality. Of if you have deep pockets you could offer both. Apple has clearly chosen to just go low quality, high volume.

          1. Mike seems to care more about user experience than profits. As a longtime Mac user, I agree with him. Beats might make money, but it has done nothing to improve the Apple experience.

  5. I use and like Pandora specifically because it allows me to learn about music I’ll never, ever hear on crap USA commercial radio. I’m pleased to have learned of several bands and musicians via Pandora whom I’ve bought and enjoy listening to regularly.

    I tried Apple Music and found nothing remotely as informative or well done as Pandora.

    As to whether Pandora wants to be bought, I have no idea. I do know that the RIAA hates Pandora’s guts. But that’s fine because I hate the RIAA’s guts, the parasitic dicks.

    What I don’t understand is why Apple doesn’t comprehend how Pandora works so well for its customers. You’d think Apple would at least make a decent effort at emulating or imitating them.

    1. I am no fan of rental music and if one remembers, it was pioneered by Real Networks and Microsoft- so there you go.

      Apple could have bought Sirius Satellite Radio and done amazing things with it.
      1-Take the old XM service and repurpose the bandwidth and coverage to deliver data to Apple devices by satellite- bypassing the ISPs and also giving an in house stream for telematics.
      2- Keep the Sirius service and lease out many of the channels to third parties for freely distributed satellite radio. Let NBC, CBS, ABC, CNN, Bloomberg, Fox, ESPN, BBC and others rent channels that they are free to program as they see fit. Apple could keep any number to program and distribute as they pleased.

      Satellite Radio goes where cell phone data drops out and that is a BFD for many people in many places. If Apple had they ability to deliver data by satellite to devices over a private network to cars, planes, trains and boats it would be a great competitive advantage.

      At my writing SIRI has a market cap of $24.14 Billion (US) which is chump change for Apple.

  6. If Apple were stupid enough to try to buy Pandora they would face significant anti-trust issues in the EU and possibly the US. That and the fact that it replicates a service Apple already has overpaid for- Beats.

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