If I had to put my testicles on the chopping block and successfully pick one acquisition that’s going to take place in the next 12 months or lose my marbles, I’d without hesitation point Cupertino way and predict that Apple will buy Pandora.
I love Pandora. I have it playing constantly and I’m amazed at the number of cool new artists I’ve come across that I never would have heard of before. And that’s really why these two great companies fit together so well. Pandora is simply the greatest music discovery engine ever invented and if integrated into iTunes could potentially significantly drive up music purchases as buyers consistently discover new artists that match their tastes.
Apple is already well aware of this fact, of course. When you run Pandora there’s an iTunes ad that runs down the side and you can click on it and go and purchase the song your listening to. I guess the question then is what’s going to push these two companies into taking their existing relationship further and actually come together.
Firstly, it would be a great branding move for Apple. Apple, iPod and iTunes are all very well-positioned as the music lover’s first choice. Whether it’s creating music in Garageband, playing your music on an iPod or buying and managing with iTunes, Apple has cred. Pandora, of course, with its music genome project, whereby it has a staff of music afficianado’s classifying and categorising as much music as it can get its hands on, is the ultimate in cool. It certainly whips some ass, on a faceless, machine-oriented music recommendation service like Yahoo might be perceived to offer.
Can you imagine the raptures that the Apple faithful are going to go into if at next year’s MacWorld Steve Jobs walks out and announces the Pandora acquisition.
If that happens, chances are he will simultaneously announce the connected iPod. That’s where the magic happens between Pandora and iPod. You’re out on the road, connected iPod strapped to your waist and you’re streaming Pandora songs. You’re paying Apple a monthly fee for the connectivity, on top of which they bundle a Pandora subscription. Cool! Wow, that was a great, new song you’ve never heard of. You press a couple of buttons on your iPod and it downloads the songs to your iPod harddrive, adds the download charge to your monthly bill and you’ve magically grown your music collection with almost zero effort. Suddenly, BitTorrent seems way too hard.
If Apple doesn’t buy Pandora, someone else will. Google, Apple and Microsoft will all want this kind of personalised streaming music offering because it’s an almost unparalleled vehicle for delivering targetted, personalised advertising. You’ve already told these companies a lot about you based solely on the kind of music your listening to, so as well as throwing you down a song that should appeal to you they can just as easily stick in a targetted, relevent advertisement.
Oh, and imagine if you control the hardware too like Apple does and you can build a GPS device that tells the ad server exactly where you are. “We see your passing Starbucks, drop in now for a half-priced cup of coffee!”.
If there a more powerful advertising medium than that, I’d like to see it. it’s got attention, relevence and context all in one. It wouldn’t even be unfeasible to suggest, especially as the hardware continues to be commoditised that a company like Apple could give away the iPod to anyone who signs up to a connected contract and who agrees to receive advertising at the same time. Screw those every-shrinking hardware margins, the money in the future’s gotta come from a combination of comms, music sales and advertising.