The biggest question around Pandora is whether radio is enough? Pandora’s ability to create a personalized station through an algorithm provides better listening than a radio station that is beholden to whatever the masses like. The internet allowed this level of personalization. However, as technology continues to automate human functions, the best companies are finding a way to retain the human touch. Apple Music is a great example of this. It has the algorithm based internet radio, pairs that with playlists curated by popular DJ’s, and add’s the ability to make a curated playlist from its library yourself. Apple also has the added benefit of being built on an ecosystem that so many people are already connected to through their computers and their cellphones.
Pandora will never be able to compete. As an internet radio station, its digital content licenses are built so that it can operate as a radio station. This means they cannot do things like play songs on-demand or skip through too many songs. Pandora, existed to fulfill a need for music delivered through the internet, they just made the wrong bet. The world didn’t want the radio on their computers, they just wanted music. The change of venue from the car to the phone or computer has changed what consumers expect from a music service.
My guess it the Pandora will lose listeners which will drop ad revenue. They may attempt to build more attractive features to retain the paying customers. However, I think these attempts will fail as their content licenses are very limiting. I don’t think Pandora will go away. But, it will move from an active listening destination to a place for background music.
Lillian, I think you nailed it on Zara’s success. The flexibility that they have built into the design process has allowed them to remain on trend.
My first question on Zara’s future success is to Trang’s last point above. How will Zara maintain success in the presence of such rapid growth in online sales? However, I think this may be a strong opportunity for Zara. This online presence may align with their strategy of flexibility. We are starting to see brands have “online exclusive” inventory and if Zara adopts this approach they may be able to get a pulse early for which niche items will sell through in-store. The underlying data on purchase location that is fed from web and mobile shopping can also be used to inform decisions on inventory management in-season.
Secondly, with design based in-house, Zara can follow trends, but it still has a certain style guide season to season. This differentiates it from some of the larger department stores who buy from outside designers. We have seen J. Crew and American Apparel struggle as of late. Both of these companies were once praised for their in-house design team’s ability to connect with its customer. Will Zara be able to maintain its core customer and still stay on trend once the overall style trend moves further from its beginnings?
Thomas, I enjoyed this post on TaskRabbit. I think they have a great product in an industry that is pretty hot right now. My only questions on Task Rabbit are about the future.
Because this operating model is so easily replicable, there is currently a land grab between these same kinds of on-demand services. You have everything from direct competitors who attempt to complete a diverse range of tasks like TaskRabbit, to more specialized players who focus on laundry for example. TaskRabbit benefits from density in a market. The more taskers there are in an area, the lower they can pay the taskers and the faster they can get the tasks done. This high level of competition, paired with the positive effect of density makes it really important that TaskRabbit control a market. In order to own a market quickly, you see players like TaskRabbit providing discounts and promotions, and burning venture funding to do so. But, in the long run, once prices rise is the convenience of a TaskRabbit going to be worth the true cost to customers?