Pandora And Mobile Ads, A Touch Too Much: Part II

On Seeking Alpha

If you are invested in Pandora (P) or Sirius XM (SIRI), you are probably painfully aware of the ongoing debate: Does Sirius XM compete with Pandora? And if so, is either company a better investment than the other? I have come to the conclusion that yes they are indeed competitors. However, it is unlikely that the success of one would spell doom for the other. They both afford a better potential to produce returns far greater than the debt-laden, terrestrial behemoth Clear Channel (CCMO.PK). Clear Channel is the king of radio, but it is slowly and steadily losing favor over its dominion.

In the way that I view and use both Sirius XM and Pandora, I am glad that both services exist. They have both challenged and changed forever the ways in which we can now consume "our" radio. With either company, we are afforded much more control over the radio's presentation and variety of music and other programming. No longer is our choice of radio station limited by our proximity to a strong terrestrial radio tower.

As to which is a better investment, and as it stands today, Sirius XM's business model of subscription based radio is far superior to an ad-based model when it comes to monetizing radio listening, as illustrated in the image I created below.

Back to the focus of these articles. Pandora actually has a choice in how much they have to pay in royalties. If Pandora can increase its revenue so that...

Read more on Seeking Alpha:http://seekingalpha.com/article/461791-pandora-and-mobile-ads-a-touch-too-much-part-ii