There are those who think the battle is over, that Pandora has won. Just look at the company's tremendous lead!
The problem is that radio critics who claim victory think the game is in the bottom of the ninth when in fact it is just the top of the first inning.
The game has just begun.
This was vividly illustrated with the soft roll-out of eMusic Radio, thirty-nine curated channels of new music.
At first glance it might appear that Pandora has nothing to fear from the service, but it does.
Historically, markets evolve as a broad undifferentiated product is attacked by more and more new better-targeted products.
We’ve seen this played out many times in radio.
AM Top 40 began as a broad highly successful format. It was then challenged by Underground FM. Rock itself then split into narrower formats, while Top 40 morphed into multiple variations of stations playing the hits.
Radio has historically fragmented along music format lines, but this time around the fragmentation may be based on something else–-like music discovery.
One of the key benefits Pandora users cite is music discovery. The way users describe the experience is that their personalized channels play mostly songs they know, but now and then the service plays something new and unexpected.
emusic takes the benefit of new music one step further and uses (human!) programmers to create channels designed to highlight new and unfamiliar music. This is how Billboard explains the service:
The stations cover a wide range of genres and styles, from post-punk to alternative country to guilty pleasures (the site has plenty of major label pop stars in its catalog), and will be continuously updated by the eMusic editorial staff.
The more successful Pandora becomes, the more companies will target it with new better differentiated music services. That’s how competition works.
As we pointed out last year:
Pandora may have a tremendous lead over its competition, but it remains to be seen whether the service can sustain its lead. As countless Internet companies have discovered, there is no “first-mover” advantage when it comes to new-media.
As Pandora grows, you can expect many more new competitors, and more choices for users.
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