Is Pandora Peaking?

Pandora's (NYSE: P  ) popularity may be peaking at the worst possible time.

The leading music streaming company posted its metrics for the month of January.

The music discovery pioneer appears to be doing well on a year-over-year basis. The number of active listeners rose 38%, to 65.6 million last month, and its listener hours soared 47%, to 1.39 billion.

Things don't look so rosy once you pull up the company's metrics for the prior month. Pandora treated 67.1 million active listeners to 1.39 billion hours in December. In other words, usage remained the same, but there were fewer listeners.

"It's a season thing, you idiot," bulls will counter; but I'm all over that.

A year ago, the number of users remained at 47.6 million in Dec. 2011 and Jan. 2012, and listener hours grew from 906 million to 952 million.

In other words, something's clearly happening here.

The next few months will bear watching, and it may make for tough comparisons for Pandora outside of any organic issues.

Sirius XM Radio (NASDAQ: SIRI  ) introduced its own personalized radio platform two weeks ago. It's still in beta, and it may take some time before it emerges as a threat to Pandora. However, Sirius XM already has 23.9 million subscribers. Getting them to pay $3.50 a month more for all of its streaming offerings -- including on-demand listens of its proprietary content, and now the Pandora-like power to generate tailored play lists -- is going to be a compelling value proposition.

The 800-pound iGorilla in the room is clearly Apple (NASDAQ: AAPL  ) . Pandora shares seem to sneeze with every report detailing Apple in negotiations with music labels to roll out its own streaming service. Apple may have sold 25 billion songs through iTunes, but it knows that streaming and discovery are the paths to growth in digital music.

Pandora's already having a challenging start to 2013, and now it's about to get competitive.

Cracking open Pandora's boxPandora has won millions of devotees among music fans, but few supporters on Wall Street. The online jukebox has put up dramatic growth numbers in its listenership, and seems to be redefining the way we consume music, a transformation that's only likely to grow. But high royalty rates and competition from all corners threatens to silence this upstart before it ever grabs the microphone. Can Pandora translate success with its listeners into a prosperous business model that will deliver for investors? Learn about the key opportunities and potential pitfalls facing the upstart radio streamer in The Motley Fool's new premium research report. Not only will you get the kind of insight normally found from high-priced Wall Street brokerages, but you'll also receive a year's worth of free updates. All you have to do is click here now to activate your subscription to this invaluable investor's resource.