Skip to main content

Market Overview

Is Spotify a Threat to Pandora?

Share:
Is Spotify a Threat to Pandora?

Could the growth of Spotify threaten online radio giant Pandora (NYSE: P)? According to Bloomberg, Spotify is close to signing a deal with record labels to offer free mobile radio globally.

Spotify offers access to an extensive catalogue of music, allowing users to stream songs over the Internet. Pandora offers a similar service, but unlike Pandora, Spotify lets its users select individual songs and artists -- Pandora only offers online “radio stations” that play a variety of artists.

But the key difference between the two services lies in their relation to the mobile Internet. Spotify's free version is only available on desktop computers -- not Google's (NASDAQ: GOOG) Android or Apple's (NASDAQ: AAPL) iOS. If users want to listen to spotify on their mobile devices, they must pay a monthly fee of roughly $10.

Fundamentally, Spotify seems like a better choice: the freedom to pick individual songs is alluring, and Spotify's catalog of available songs is far more extensive. But the inability to get free Spotify on mobile devices is a significant limitation.

Rich Tullo of Albert Fried has a Market Perform rating on Pandora and $13 price target. He doesn't believe that Pandora will be the best stock for equity investors, but Tullo loves the company. He told me that he doesn't view Pandora's competitors -- including Spotify -- as a threat.

Still, Spotify has aggressively expanded in recent years. If it can bring its free service to mobile devices, Pandora investors should be concerned.

 

Related Articles (AAPL + GOOG)

View Comments and Join the Discussion!

Posted-In: News Tech Trading Ideas Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com