Two Superstar Musicians Are Working on Yet Another Pandora Media Inc (P) Competitor

But a subscriber to a streaming music service isn’t going to buy music from iTunes, and will therefore be more willing to migrate between devices. Consequently, Cook might’ve told Iovine to get lost — preferring to keep Apple’s music business in-house.

But if he didn’t, it would be a significant competitive advantage for Daisy. Pandora still has strong name recognition — perhaps the most of all streaming music services. An iOS integration would help Daisy catch up.

The case for Pandora

I’m not sure if it’s wise to short Pandora Media Inc (NYSE:P). Over the last few months, the company has rallied significantly, in part because short sellers have probably covered their positions.

But at the same time, the bull case for the company seems incredibly bleak. Pandora Media Inc (NYSE:P) isn’t making any money as is; what will the long-term, net effect of all these rival services be? It certainly won’t be positive.

Pandora Media Inc (NYSE:P)’s CEO would have you believe these services compete in a different market — that Pandora Media Inc (NYSE:P) is about free, curated radio and these alternative services are about paying for on demand music.

That’s true, to some extent, but Daisy is looking to close the gap in terms of curation. At the same time, someone shelling out monthly for a service isn’t going to listen to Pandora. So, for every consumer a service like Daisy captures, that’s one less listener Pandora can appeal to.

I simply fail to see a compelling reason to invest in Pandora Media Inc (NYSE:P). It’s a non-profitable business in a market that’s already highly competitive, and getting more competitive nearly every day. Daisy is just Pandora’s latest rival, though if Dre’s previous successes are any indication, it could end up being the best.

The article Two Superstar Musicians Are Working on Yet Another Pandora Competitor originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Skullcandy. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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