Wednesday, June 11, 2014

Can Pandora Grow Any Larger?

When a new technology or product is launched, it usually goes through 4 phases if it's successful. The first is the Early Adopter stage where people who like to use new technology or products will take a chance simply because it's the latest thing. At this point the technology or product is clearly in the niche phase.

Then comes the Early Follower stage were the technology or product is proven and stable and attracts enough users to be an ongoing business, and with just a little help, hits critical mass to go to the next level.

The Mainstream stage is where the technology or product has matured and achieved widespread popularity. The final Late Adopter stage is where the technology or product is finally adopted by those always late to technology.

As you can see from the chart below by Media Consulting's Mark Mulligan, Pandora has reached the final stage of market saturation, and had even dropped a bit when iTunes Radio was launched.

That proved to be just a blip, but the fact of the matter is that Pandora has reached a level where it may not have that much growth left, especially not at its previous rate. As more people discover the joys of interactive streaming (Spotify, Beats Music) as opposed to a radio-like service, Pandora may find itself stalled at around the 70 million users that it now has.


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