Why Would Mel Karmazin Go to Pandora Media Inc (P)? – CBS Corporation (CBS), Sirius XM Radio Inc (SIRI)

Pandora Media Inc (NYSE:P) may have stunned investors with last week’s announcement that CEO Joe Kennedy would be stepping down after helping the company’s board find a replacement, but it didn’t take long for speculation to begin stirring about Mel Karmazin taking his place.

Billboard opined a day later that Pandora may be looking for a seasoned radio veteran to take Kennedy’s place. A former radio exec argues that Karmazin would be a good fit.

“He is the smartest media executive I have ever known,” he argues.

Pandora Media Inc (NYSE:P)Several financial outlets and bloggers have been throwing their weight behind the former CBS Corporation (NYSE:CBS) and Sirius XM Radio Inc (NASDAQ:SIRI) chief to take the reins at Pandora.

It doesn’t seem feasible.

Karmazin doesn’t come cheap, and you have to remember that Pandora Media Inc (NYSE:P) lost money in its latest fiscal year on the way to ringing up $427.1 million in revenue. Sirius XM Radio Inc (NASDAQ:SIRI) was profitable on $3.4 billion in revenue.

Pandora Media Inc (NYSE:P) won’t have a problem finding a proven terrestrial vet to hop on the growing Pandora platform, but Karmazin is probably out of its price range.

Then again, does Pandora Media Inc (NYSE:P) even need a radio veteran?

Pandora Media Inc (NYSE:P) loves to compare its usage to the country’s overall radio listenership — it’s not up 8% of total U.S. radio listening — but it’s not a radio company. It’s a streaming music service with comedy as filler.

This isn’t Sirius XM Radio Inc (NASDAQ:SIRI) with $300 million a year to invest in programming and content. This isn’t CBS Corporation (NYSE:CBS) with countless local AM and FM stations to nurture.

Sure, one can argue that at the end of the day Pandora Media Inc (NYSE:P) is simply out to sell audio ads just like conventional radio. That’s fair. Pandora’s push to match Sirius XM Radio Inc (NASDAQ:SIRI) and Spotify in premium subscription revenue isn’t terrestrial fodder, though that’s more ammo for Karmazin as the ideal CEO as the master of both.

However, Pandora is ultimately a technology company. It’s no surprise that Pandora’s biggest threats on the horizon are tech giants. Google Inc (NASDAQ:GOOG) is gearing up to launch a pair of branded digital music services through YouTube and Google Play. Reports continue to surface about Apple Inc. (NASDAQ:AAPL) negotiating with its record label partners for attractive streaming royalty rates.

Pandora doesn’t need someone to pit Pandora Media Inc (NYSE:P) against CBS Radio and other terrestrial offerings. Pandora’s already winning that bout. Sirius XM Radio Inc (NASDAQ:SIRI) has been a Wall Street winner over the past four years, but Pandora is also growing a lot faster — in revenue and users — than Sirius XM Radio Inc (NASDAQ:SIRI).

Pandora needs a tech visionary at the helm. The real battle will be about technology as companies jockey for the best apps and auto dashboard integration. Karmazin would turn heads, but he’s not necessarily the leader that Pandora needs right now.

The article Why Would Mel Karmazin Go to Pandora? originally appeared on Fool.com and is written by Rick Munarriz, Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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