Wall Street Reaction to Pandora’s Chances With DOJ Review

Pandora recently hired Washington insider David Grimaldi to run their DC lobby shop. Yes, he’s from Washington and he’s here to help.

If you were worried about this hire giving Pandora an edge, don’t be.  Here’s the best the insider could come up with in reaction to the Department of Justice announcement that it is reviewing the ASCAP and BMI consent decrees (from the LA Times):

“Any review of the consent decrees must take into account the careful balance of how to best serve songwriters while also fostering competition and innovation to the benefit of consumers,” said Dave Grimaldi, Pandora’s director of public affairs, in a statement.

This is evidently the party line now as another Pandora spokesperson repeated it nearly word for word in Businessweek:

Mollie Starr, a spokeswoman for Pandora, says the company looks forward to participating in the federal review and praises the existing consent decrees for “enabling new industry entrants.” The review, she adds, “must take into account the careful balance of how to best serve songwriters while also fostering competition and innovation to the benefit of consumers.”

First of all, I’m glad to know that Pandora is worried about songwriters, because songwriters are worried about Pandora, too.  But not for the reasons Mr. Grimaldi might think.  If I had to make a list of “Last People in the World Concerned About Songwriters”, Pandora would be high on the list.  Sorry, dude.  Nobody wants to hear anything from Pandora about “how best to serve songwriters.”

If you want to read excellent business case analysis of Pandora, this commentary at The Street should be high on your list (This Time It’s For Real: Apple has Killed Pandora).  But the most telling part of the analysis supports the idea that Pandora has almost single handedly destroyed its relationship with artists and songwriters in the delusional belief that hurting this thing called ASCAP somehow didn’t also hurt songwriters.  And it’s certainly not something that’s going to be fixed by Mr. Slick from Revolving Door Advocacy:

Pandora claimed it wanted to create a musician’s middle class. However it has done very little to support those words with actions. If a musician’s middle class exists as a result of Pandora’s efforts, it must be out of sight and out of mind, sweeping floors in the mansions of Pandora’s filthy rich executives. Or maybe they’re doing construction work at Pandora’s expanding offices that now stretch from coast to coast in the nation’s most expensive real estate markets. Not too shabby for a company that claims it can’t afford to do anything other than hawk advertising because of the royalties it must pay content creators.

Pandora sold out. Selling out will come back to haunt it.

Actually, I think it already has.  Let the haunting begin.