Pandora's Profit Margin is Awfully Small

Karsten Strauss, writing for Forbes about Pandora's CEO stepping down:

The company announced late last year it had generated about $120 million in 2012, with profits of just over $2 million. Though 60 % higher than the year prior, the figure fell short of what analysts had predicted.

That calculates out to be roughly 1.67 % profit.​ Such a slim profit margin has to be a concern to investors. With the specter of current competitors (Spotify, Rdio, Amazon) and potential competitors (Google, Apple) looming, it will be tough for Pandora to continue existing as a company.

Amazon is Probably Starting a Music Price War

Aabha Rathee, writing for Wall St. Cheat Sheet:

Amazon announced last week that its 22-million song catalog was now optimized for users of Apple devices in a way that lets them circumvent the iTunes store and pay lesser for their music. Users will be able to the Safari web browser on their iOS device to access the music, with purchases then directly stored to their Amazon Cloud Player library.

Rathee later goes on to mention (via quotes) how this action is similar to the strategy that Amazon employed when eBooks became available on the iPad. As Matthew Yglesias opines in an article over on Slate, Amazon can be a scary competitor even when (or perhaps especially when) it doesn't care about profits.

I'm not entirely convinced that Amazon can continue to play the market share game this aggressively, but I'm intrigued by the prospects of a formidable competitor keeping Apple on its toes.