Analysts Still Not Agreeing on Pandora Media
-- Analysts continue to have widely varying opinions of Pandora (NYSE:P), which fell 4.76% to $10.01 on Wednesday. Wedbush initiated coverage of Pandora on Monday with an "outperform" rating and a 12-month target price of $14.00. The research note cited Pandora's "rapid user growth rate," potential to serve ads more frequently and its strength in mobile as some of the key factors behind the rating.
Oddly, Wedbush's research note does not mention last week's launch of the personalized Internet radio feature in Clear Channel's iHeartRadio service. It would seem this kind of direct attack on Pandora by the nation's largest broadcast radio company would at least factor into an analysis of Pandora's competitive landscape.
On the flip side is BTIG analyst Richard Greenfield. He dropped his target price on Pandora to $3.75 from $5.00 in a research note to investors Wednesday. BTIG maintained its "sell" rating. Greenfield noted that "social is one of Pandora's key problems" and pointed out the company will not be presenting at Thursday's Facebook f8 conference.
True, but Pandora did roll out its redesign to the general public Wednesday. The new website, designed with HTML5, includes new Facebook-powered social features and loosened restrictions on free listening time (putting it more in line with the unrestricted free listening on Clear Channel's new, personalized iHeartRadio service).
A Rare Feat: Sirius XM Stock Finishes In Black
-- Sirius XM (Nasdaq:Siri) was a rare stock to finish in the black on Wednesday. Markets reacted negatively to the Federal Reserve's late-afternoon announcement it will sell some short-term securities to buy longer-term securities -- a move called "Operation Twist" that will extend the average maturity dates of its securities. Sirius XM's decision to raise its base monthly price to $14.49 from $12.95 appears to be popular with investors. That announcement came Sept. 14 -- the same day the company affirmed its 2011 guidance (net subscriber additions of 1.6 million, revenue of roughly $3 billion, nearly $400 million of free cash flow). The company's stock is up around 5% or 6% since then, while many other stocks have lost ground.
The Remarkable Four-Percent CD Sales Decline
-- Of all the recorded music sales numbers of 2011, one of the most surprising is the 4% decline in CD sales through Sept. 18, according to Nielsen SoundScan. After a string of years of double-digit declines and constant -- and often non-credible -- threats that the CD format would fall off a cliff at any second, a 4% year-over-year decline is pretty remarkable.
Here's the really interesting side to this story: part of the CD's improvement is coming from sales that already existed. Billboard.biz has been told that Nielsen started counting sales from Amazon Marketplace in the Internet/mail order/venue segment of the non-traditional category. (Amazon Marketplace allows sellers to offer new and used items alongside Amazon's inventory. SoundScan does not count used CD sales in its figures, by the way.) These are sales that had already existed but until recently were not being reflected in SoundScan's numbers.
As a result of this change, as well as other factors, Internet/mail order/venue CD sales are up 19% through Sept. 18, according to Nielsen SoundScan. Executives Billboard.biz has spoken with do not believe there has been any material change to the number of artists reporting venue sales to SoundScan. Instead, the change in reporting of Amazon Marketplace sales is believed to be behind most of this year's increase. And it's a big turnaround from this time last year. Through Sept. 19, 2010, non-Internet/mail order/venue CD sales were down 5%.
The key implication here is that part of the 3% increase in album sales is the result of this change in reporting rather than an organic increase in purchases. The year-over-year gain in CD sales in the Internet/mail order/venue segment has been 3.44 million units. The year-over-year gain in total album sales has been 6.9 million units.
But one fact does not change; album sales are up this year with or without a change in the reporting of Amazon Marketplace sales.
The New WSJ Facebook App and Social Music
-- Can the future of music be seen in the new Wall Street Journal Facebook app? Yes, the WSJ debuted a Facebook app Monday. The app is a bit clumsy, but it's just a few days old and will certainly improve over time.
Here are the key characteristics of the app: it's ad-supported, it's viewed within the Facebook platform, it allows users to discovery news based on social and personalized factors and it doesn't appear to be a cannibalization threat to the WSJ's main products, its print newspaper and WSJ.com.
Change a few of the words in the above paragraph and you've got a pretty good experiment in social music. They key word is experiment. Just as the WSJ's app appears to be an experiment/learning experience, such a music app would be unlikely to turn into a major, revenue-generating product any time soon.
Many music services now use Facebook for social integration: Pandora, Spotify, iHeartRadio, Turntable, Rdio, Myxer and Ticketmaster, among others. But the WSJ has gone a step beyond merely using Facebook's Graph API. The WSJ app lives on Facebook. It creates a personalized list of suggested articles with the help of Facebook. And it allows users to read articles on Facebook -- no need to visit WSJ.com and no need to sign up for a subscription (yet). It's a completely different way to get WSJ content in a familiar environment.
(WSJ Facebook app)
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