Usually when a business unveils some exciting brand-new product, it follows up by expanding its workforce, not shrinking it.
So it would seem things are not exactly going well for Pandora, which announced on Jan. 12 it will lay off 7% of its US workforce—only weeks after proudly launching Pandora Premium, its $10-a-month subscription music platform meant to rival other those of bigger streaming players like Spotify and Apple Music. “The commitment to cost discipline will allow us to invest more heavily in product development and strategic investments,” said CEO Tim Westergren, whose own history with the company hasn’t been the sturdiest.
Though its stock is up 6.7% today, the general trend is not optimistic.
Founded nearly two decades ago, Pandora is a digital music veteran, older than its competitors.
But its troubles lies in the fact that it made itself a name in radio-style music streaming, in which listeners are given songs rather than selecting them—a platform that’s rapidly been overtaken by all-you-can-listen, on-demand music streaming. At the end of 2015, the on-demand Spotify edged out Pandora as the world’s biggest music streaming service; with the rise of Apple Music over the course of 2016, the competition has only worsened. Pandora’s new Premium offering (finally an on-demand service) is a classic case of too little, too late.
It’s looking more and more like the company is being edged out by newer, hotter rivals, and will go the way of Nokia—which absolutely dominated the mobiles phone market and made what is considered the first smartphone in the 1990s, only to see its lead be snatched away by rivals it didn’t see coming. (Apple, it seems, is a ruthless predator in both phones and streaming.)
Nokia’s hopeful rise and brutal fall can be summed up in just one chart.