Pandora and Spotify: different beasts
When I joyfully inform people of Pandora's return to New Zealand (I'm really just a blast at parties), they always seem to ask the same question: "Don't we already have Spotify though?"
I can understand confusing the two, or thinking they perform the same service. They kind of do - both are music streaming services, but they are really quite different. The best analogy I can think of is that of a radio with hundreds of thousands of stations, (Pandora) and an incredibly vast CD collection (Spotify). If you want a one-sentence answer: Spotify is better, but it isn't quite that simple. Pandora excels at discovery, while Spotify offers a more complete package.
Pandora is much more of a waypoint, a stopoff on your journey of music appreciation, than Spotify is. Consequently, it is much more simple. I logged into my ancient account I had set up when it was available in our country (the horror) and made a new "station" based on an ambient producer I liked. First it played me a song by him, complete with a description of his exact genre (Pandora has lofty principles/ambitions/methods). While I sat and read, it played me a swath of other music in the same vein, very well. Pandora only lets you skip a certain amount of songs, but I felt no need to. What Pandora lacks, however, is an accessible library of the tracks it collects - it served me with links to buy the music and I could create a station based on a new artist I followed up - but I couldn't just try out an album of his, from right in the app. On Spotify, this is trivial - I found the artist and dragged an album into my library.
For purposes of comparison, I tried using Spotify's "radio" service on the same artist. It pulled up a few similar-sounding things, sure, but it also pulled completely off-timbre songs; I wouldn't feel confident leaving it on to sleep to. Though I could easily pull anything from an artist's catalogue and listen to it immediately, I wasn't actually finding new bands I liked. It required me to return to the app repeatedly, breaking my concentration, to skip a song that didn't fit. I ended up returning to the lumbering 70 gigabyte beast that is my iTunes library, surely not the optimum fit in 2012.
Spotify is an all-round solution. I could conceivably ditch iTunes with it. Pandora has no such ambitions - but it DOES run in the browser, so it makes a perfect fit if you want music at work, unlike Spotify. The Pandora suggestion or radio function appears to be better than most of the alternatives, though Spotify can attempt to get the feel of an entire playlist, rather than just a single band. I heartily recommend both for differing contexts - well, at least their free versions.