Pandora’s Spin Machine Trading on Ambiguities Again

November 27, 2015 Leave a comment

In case you missed it (and US readers probably have better things to do today as it’s the Thanksgiving holiday here), Pandora is apparently feeding stories to the business press with that special level of duplicitousness we have come to expect from P.  Unfortunately, this time it involves Adele’s “25” record.  But the manufactured news resulted in a $27 million one-day increase in market cap for Pandora.

Here’s the story from the Wall Street Journal–you know, the venerated business publication, the Bible of Wall Street, relied on for correct information by millions of investors.

Investors are giving Pandora Media Inc. a hearty hello on Wednesday, sending shares up as much as 5.8% after the company confirmed that Adele is bringing her latest album, “25,” to its streaming music service, leaving competitors including Apple Music and Spotify in the dust.

News of the album’s availability on Pandora comes after Adele’s camp earlier said she’d decided against making her record-breaking album available on streaming services. Pandora acts more like a radio station than some of its rivals, in that it doesn’t allow users to select individual songs.

So quick–does the Wall Street Journal’s reporting leave you with the impression that Adele “decided”–because she “is bringing” the album–to give the artist-friendly Pandora the right to stream her new album?

How about Reuters?  Did Reuters report the news correctly?

Pandora Media Inc presented its listeners with British singer Adele’s best-selling album “25”, days after streaming companies said the album would not be available for streaming at release.

The U.S. online radio service said all songs from Adele’s album, which broke records in first-week sales, are now available on its radio service, sending Pandora shares up on Wednesday.

“Since “Hello” was added to Pandora’s platform last month, her total station adds are up 1,200 percent,” the company told Reuters in an email.

MTP readers will remember that must be BS because Pandora gets a compulsory license (applicable to Adele’s US distributor).  So Adele couldn’t say no to Pandora.  So quick–do these news stories make it sound like Pandora some how came out ahead of other streaming platforms in some competitive contest?

Wouldn’t it have been more accurate for the Wall Street Journal  (aka The Bible of Wall Street) to advise Pandora investors that Pandora had no competitive success in “getting” the Adele record?  Maybe The Bible could advise investors that Pandora is getting the Adele record because the government forces all artists to make their music available on Pandora.

Not to mention that Pandora is only permitted to include records in a personalized webcasting stream that bears no resemblance to interactive streaming on Spotify.  So The Bible is actually comparing apples…ahem…to Marmite on toast.

The Bible also fails to mention that Adele has participated in the streaming format even when the government didn’t force her to do so.  Her single “Hello” has been available on iTunes, Spotify and other streaming platforms since October 23.  That’s right–all this press that has been ginned up about Adele and streaming is all about “25”–that’s the album.  Even that isn’t entirely accurate because if you buy the album on Amazon or iTunes, you can stream it to your player.

Not only did Spotify get the single, but according to The Atlantic, the single also:

“…broke one-day streaming records on Spotify and Vevo, and appears on track to set a benchmark in the category of one-week U.S. digital song sales. It easily beat competition from a new Justin Bieber song, smashed a record recently set by Taylor Swift, and has already been viewed on YouTube far more times than the Star Wars trailer released a week ago.

Again, having a record setting single on Spotify should count for something in news reporting for investors about Pandora.  Wouldn’t that have been a relevant fact in the who, what, when, where, why, how business?

The news–or shall we say propaganda–drove Pandora’s stock price up about 5%–or somewhere around a $27,690,000 increase on the day of the value of Pandora’s outstanding publicly traded shares.  Probably more than Pandora paid songwriters all year.

The Verge, no friend of the music business, actually got the statutory licensing part right but stuck to the talking points and laid on the equivocation for the “not on Spotify” part:

Adele’s 25 is the biggest album in the world right now, and it’s made it there all without a single stream on Spotify [see what they did there?  The antecedent of “it” is the “album”.  True aside from record setting streaming of the “Hello” single on Spotify]. In fact, it might have made it there because there hasn’t been a single stream on Spotify: Adele and her label made the decision not to stream 25 anywhere online, encouraging people to actually buy the album or its songs outright. But despite the ban, some services [like Spotify, Apple and Pandora] have songs from 25 up streaming…

Of course, Adele and her label are likely a lot less concerned about Pandora streams than Spotify streams. Pandora is just a radio station [no, it’s nothing like a radio station, Pandora pays royalties through SoundExchange and radio does not–see #irespectmusic], so it’s likely seen a bit more as a promotional tool than as something that will cannibalize album sales….[oh, so streaming does cannibalize sales?]

Pandora…doesn’t have a deal with labels [except for Pandora’s direct deals]. It relies on a law governing “non-interactive” streaming services….


We could fully expect Pandora to try to pull yet another snow job on the public to drive up their stock price with deceptive information, but it is rather shocking that major business news outlets will let them get away with it.  The Bible is upstaged by The Verge?

Google’s University Astroturfing Leads to FTC

November 24, 2015 Leave a comment


Salon posted an eye-popping expose on Google’s influence peddling at major American universities (“Google’s insidious shadow lobbying: How the Internet giant is bankrolling friendly academics—and skirting federal investigations” by David Dayen).  Of course, we’ve been watching this space since 2006 when Google funded Lawrence Lessig’s Center for the Internet and Society at Stanford with $2 million (not to mention the $1.5 million Google gave to Lessig’s pet project, Creative Commons).

Salon uncovered hundreds of thousands going to George Mason University to help Google fight an FTC antitrust investigation:

In June 2011, Google had a problem. The Federal Trade Commission (FTC) had opened multiple investigations into whether the tech giant illegally favored its own shopping and travel sites in search engine queries; restricted advertisers from running ads on competing sites; and copied rival search engines’ results.

To fight this threat, Google turned to a key third-party validator: academia, and in particular one university with a long history as an advocate for corporate interests.

From the beginning of the FTC investigation through the end of 2013, Google gave George Mason University’s Law and Economics Center (LEC) $762,000 in donations, confirmed by cancelled checks obtained in a public records request. In exchange, the LEC issued numerous studies supporting Google’s position that they committed no legal violations, and hosted conferences on the same issues where Google representatives suggested speakers and invitees….

Google’s actions between 2011 and 2013 show how they dodge legal bullets: by molding elite opinion, using the support of experts and academics as a firewall against criticism. The donations to George Mason and professors at other universities reveal that Google purchases that privilege.

Not surprisingly, one of George Mason University’s leading professors authored a paper supporting Google–this is pretty standard stuff with corporate funded academic research.  The difference this time is that the academic was attempting to influence the FTC and was himself later appointed to the FTC by President Obama who has clearly become Google’s best friend in Washington.

In November 2011, future FTC Commissioner Joshua Wright, then still a law professor at George Mason, wrote “Defining and Measuring Search Bias: Some Preliminary Evidence,” where he discounted Google’s “alleged bias” toward its own subsidiaries in searches.

“From an antitrust perspective,” Wright wrote, “differences in own-content references across engines fail to indicate consumer harm,” but instead “imply the existence of intense competition among engines.” This is one of over 70 PowerPoint presentations and white papers featuring Google that can be found at the LEC website, most of which align with the company’s policy preferences….

A professor at George Mason and author of many pro-Google studies, Joshua Wright, even later became an FTC Commissioner [appointed by President Obama]. He had to vow to recuse himself from Google-related matters for two years to deflect concerns about conflict of interest. But before Wright’s confirmation, the FTC already decided against filing charges against Google, overriding its own staff’s recommendations. Google only had to voluntarily agree to alter some of its business practices to resolve the case.

So remember–if Google starts telling you about…ahem…academic studies, you can almost bet they paid for them.

Adele Outclasses Her Critics

November 21, 2015 Leave a comment

Notwithstanding the predictably boring and misogynist spew about Adele from Bob “Trigger Warning” Lefsetz, Adele’s “25” album sends an unmistakable message.  Her recording reminds us of the one idea that streaming boosters and other Spotify apologists want you to forget. The CD configuration still makes up an average of 50% of sales, particularly for superstar releases, and in Adele’s case, CDs and digital downloads make up 100% of the album product configuration for “25,” at least for the time being.

But not the single–“Hello” has been available on iTunes, Spotify and other streaming platforms since October 23–you know, the commercial single street date.  That’s right–all this press that has been ginned up about Adele “snubbing” streaming is all about “25”–that’s the album.  Somehow few of these stories (and I say “few” but I think if you read all of them you would find that none of them) tell you that Spotify got the single.

Not only did Spotify get the single, but according to The Atlantic, the single also:

“…broke one-day streaming records on Spotify and Vevo, and appears on track to set a benchmark in the category of one-week U.S. digital song sales. It easily beat competition from a new Justin Bieber song, smashed a record recently set by Taylor Swift, and has already been viewed on YouTube far more times than the Star Wars trailer released a week ago.

Remember when Spotify board member Sean Parker said that Taylor Swift was an “anomaly” which explained how Taylor was “still able to sell downloads and she’s still able to sell  [CDs] in some parts of the country” an obvious swipe at country music and flyover states.  Adele will come close to and probably will shatter the previous first week benchmark of 2.4 million sales that was set in 2000, that is, before the real anomaly–piracy destroying the music business.

HITS summed it up:

Early sales [of 25] are unlike anything we’ve seen in the modern era. The numbers are so extraordinary, we don’t have anything to properly benchmark them against. Digitally, 25 should sell over 1m, giving it the biggest-ever digital sales week.

By the look of it, there’s another message that will not go over well in the Spotify Booster Club–with sales like these, nobody cares about your weak streams beyond treating streaming like radio.  This is not to say that Adele’s windowing strategy is for everyone, but it certainly seems to work with superstar releases.  I’ve always viewed Spotify et al as a kind of after market record club operation.

Imagine if you could have given record clubs just the single.

Record clubs always were windowed to protect new releases with club holdbacks ranging from 90 days to 12 months–or in my case, as long as I could get away with.  (You could also throw a spanner in the works by giving artists a full or 3/4 mechanical rate on record clubs rather than the pathetic 3/4 of 3/4 that the clubs seemed to think they were entitled to–that would usually stop at least the Columbia House operation cold.)  Record clubs also had the attitude that they actually mattered to the front line operation, kind of like Spotify and YouTube do today.  The truth, of course, is that they actually hurt front line sales.

Of course in order to be able to prove that streaming cannibalizes sales, you’d have to find some records that are not streaming to compare to those that are.  And that’s what they don’t want you to be able to do or at least not very easily.

It’s not surprising that the tech press completely misses the importance of Adele’s windowing decision (just like they misinterpreted Taylor Swift’s decision, too).  Daisy Buchanan writing the the Telegraph summed it up quite well:

Women are always being told their worth depends on their ability to please, be liked and make life easier for everyone around them. We’re expected to smile, tow the line and avoid any behaviour that might get us branded ‘outspoken’ or ‘difficult’ (a word that Jennifer Lawrence recently used to explain why she’d previously avoided demanding the same salary as her male co-stars).

Adele is giving this sexist standard a two fingered salute, and I love her for it  [Yanks would call that the middle finger]….

Adele knows what she’s worth, and is doing what any smart woman should do when someone dramatically underestimates their value – walking out with her head held high and taking her business elsewhere.

She’s an inspiration to any ambitious woman. And if you still think that you deserve to enjoy her hard work for free [in ad-supported streaming]? You really can’t call yourself a fan at all.

And if our male readers wouldn’t want the women in their lives to do the same and be proud of them for it, there’s really something wrong with you.

Adele Proves Again that Spotify Needs Hits but Hits Don’t Need Spotify

November 20, 2015 1 comment

What You Won’t See on Spotify

Following what is rapidly becoming standard industry practice, Adele’s “25” will not appear initially on streaming platforms.  Spotify and Apple Music are mentioned as “streaming platform” but I would imagine Rdio is included in the hold back to at least some extent notwithstanding the Pandora acquisition.  (Although it is worth noting that if you buy the record through Amazon, you can stream it right away online and through Sonos–so let’s not say she “snubbed streaming”.)

This is sometimes called “windowing” or “market segmentation” and is driving streaming boosters a bit batty.  For example, Chris Cooke writing in Complete Music Update left a skid mark with this one:

Artists should be allowed to decide where their music appears, of course [oh, of course, thank you very much, no doubt some of his best friends are artists], and bigger acts will always have that right to choose written into any record contracts. Though – from a wider record business perspective – you could argue that Adele isn’t being much of a team player with this move, because those who pay £10 every month to a streaming platform are the industry’s best customers, who have in no small part helped the sector’s revenues stop declining. So the record industry is basically saying ‘fuck you’ to its most important clientele.

That’s right–continuing the mantra of “ask not what Spotify can do for you, ask what you can do for Spotify”.  Or more precisely, what you can do for Daniel Ek’s quest for IPO riches.

But Mr. Cook omits the fact that the single “Hello” has been available on iTunes, Spotify and other streaming platforms since October 23–you know, the commercial single street date.  That’s right–all this press that has been ginned up about Adele “snubbing” streaming is all about “25”–that’s the album.  Somehow few of these stories (and I say “few” but I think if you read all of them you would find that none of them) tell you that Spotify got the single.

Not only did Spotify get the single, but according to The Atlantic, the single also:

“…broke one-day streaming records on Spotify and Vevo, and appears on track to set a benchmark in the category of one-week U.S. digital song sales. It easily beat competition from a new Justin Bieber song, smashed a record recently set by Taylor Swift, and has already been viewed on YouTube far more times than the Star Wars trailer released a week ago.

Again, having a record setting single is not “snubbing streaming”.  Wouldn’t that have been a relevant fact in the who, what, when, where, why, how business?

Let’s talk about that “not a team player” idea.  Adele’s last record–which followed a similar release pattern–was so successful that I would not be surprised if Adele and Beggars added a zero to revenue for the entire music industry.  That’s being a team player.  That happened without Spotify.  (“21” was off streaming platforms for most of its 2011 album cycle.)  Let’s hope Adele does it again.  And I for one would think that the words Mr. Cooke is looking for are “thank you.”

Credit where credit’s due, however.  Spotify so far has handled the public messaging on Adele’s release a whole lot better than they handled Taylor Swift.  My bet is that this is entirely attributable to Spotify’s newly engaged resident triangulator, Jonathan Prince.  First, no quotes from Daniel “My Shoes Are Bite Sized” Ek.  That would suggest that Mr. Prince has convinced Daniel Ek that Mr. Ek’s mouth is Mr. Ek’s own worst enemy–so Mr. Prince seems to have a muzzle firmly in place.

There’s a fair amount of press coverage about Adele’s windowing her album–with no quotes from Spotify other than the one rather mealy mouthed blog post that complains of not getting the album and fails to mention the record-setting single.  That means that someone–guess who–was working the press on background to shape the story in a way that helped Spotify without leaving breadcrumbs that would lead back to the company.  Those stories didn’t write themselves.

I leave it to you to decide if failing to mention the single being available on Spotify is just more kvetching from a company with an $8 billion valuation, or is actually duplicitously misleading press manipulation by the Triangulator.

How can you tell this message massaging is going on?  Aside from being able to smell it a mile off when you see a number of press reports that say more or less the same thing, you see a lot of spin about how Adele is disappointing her fans by keeping the record off of Spotify.  According to the dozens of fan interviews conducted on the record by music industry journalists?  According to quotes from record store clerks saying “Punters are whinging no Spotify for Adele”?

Nope.  Not one quote from an actual fan or a witness of consumer behavior supporting the proposition that hits need Spotify.  Not even an astroturfed trolling comment from a Spotify message board.  I wonder why.  Especially since all this press and speculation about consumer behavior comes on street date before consumers have had a chance to behave measurably.

zane adele

Something Else You Won’t See on Spotify

It’s a much better job of message manipulation, but it doesn’t hide the fact:  Spotify needs hits and hits don’t need Spotify.  The proposition is playing out right before your eyes.

Now if we could just get the marketing people to understand the same thing about YouTube.

Call to Action: The Department of Justice is Assaulting Songwriters Yet Again

November 19, 2015 Leave a comment

Originally posted on The Trichordist:

When you write a song with another songwriter, do you ask them “Who’s your PRO?”  Never, right?  If the U.S. government has its way, you better start–because the Department of Justice wants to force ASCAP and BMI to license 100% of any song their affiliated songwriters control any part of, like a government-mandated controlled compositions clause.

Yes, you read that right. Example:  You write a song 50/50 with another writer.  One of you is ASCAP the other BMI.  The U.S. government seems to think that the rule always has been–which we all know is utter and complete bullshit–that ASCAP and BMI could both license 100% of that song.  Even though ASCAP and BMI want no part of it and have never done 100% licensing, the U.S. government wants to force them to do it.  How would that work?

It can’t possibly work, never was the deal, and…

View original 822 more words

Is Pandora Managing By Press Release?

November 17, 2015 Leave a comment

If you recall the Dot Bomb Bubble, you’ll remember what sometimes happens to newly-public companies.  It’s the press release syndrome.  Rather than working on making their core business profitable, they use their public stock “currency” to start buying other companies that have some vague connection to their business.

These acquisitions deflect attention away from “disappointing” revenue numbers and push out the day of judgement for gullible analysts–don’t judge us yet, we haven’t yet integrated companies X, Y and Z that we acquired with the stockholders’ money.  And we’re still sitting on a pile of cash from our initial public offering and follow on offering to cover our burn rate.

That cash will cover luxurious offices, preferably a lot of them.  You know, like this:


or this


Or this


And then there’s Atlanta, Santa Monica, Dallas and Detroit.  That’s a whole lotta cash burn.

You have to ask yourself–what’s the point here?  What’s the exit strategy?  And why would a stock that behaves like this produce an acqusition strategy?

Pandora Stock Drop

There will come an inflection point where the insiders at Pandora will have extracted as much wealth for themselves as they can, the burn rate will project that the company will be out of cash at some point in the not too distant future, and cash acquisitions will hasten that depletion.  (“The purchase price is $75 million in cash, subject to certain purchase price adjustments.”  Rdio is no fool–they could have taken all stock or a stock/cash mix–but they said show me the money.  It says something about how a strategic feels about Pandora’s future.)

But–the cash on hand from stock offerings could be a key element in attracting a buyer for the ultimate exit.  Now remember–if a company has never made a profit, that cash on hand from the sale of stock is arguably the stockholders’ money.  And instead of using the cash as bait to attract a buyer, there is a pretty strong argument that the cash should be returned to the stockholder from whom it came.

When you see that stock price take its first sharp turn downward, the desperation in the board room increases as executives see their options sink beneath the waves.  That’s when companies like Pandora start buying companies to deflect attention away from the fact that they can’t seem to execute on the hard stuff–like making their core business work, notwithstanding the fact that they have been handed a compulsory license at a below-market rate.

I don’t know that this “management by walking around press releases” is happening at Pandora, but would you be shocked if it were?


Vive La France

November 15, 2015 Leave a comment

Tout est soldat pour vous combattre…
Aux armes, citoyens
Formez vos bataillons…

The quintessential French chanteuse, Edith Piaf, performing the most beautiful national anthem.



Get every new post delivered to your Inbox.

Join 656 other followers

%d bloggers like this: