Pandora: iTunes Radio roadkill

“With the arrival of iTunes Radio, which comes out this week with the release of iOS 7, Apple is poised to tackle the streaming music market like no other entrant before it,” Paul Sloan reports for CNET.

“It’s shaping up to be quite a big deal. Not only will iTunes Radio pose the biggest threat to Internet radio king Pandora to date, as I argued here, but Apple now will get an opportunity to recast a decade-old debate about the respective roles of man versus algorithm when it rolls out this new piece of streaming music software,” Sloan reports. “Apple has built a service in its own image that, to a large degree, leans on taste makers as well as mathematics.”

“And the big music labels, working closely with their largest digital partner, are rooting for Apple’s success,” Sloan reports. “Because this is Apple, the potential stage is global, even though iTunes Radio is rolling out initially in the US only. The agreements Apple has with the music labels and publishers generally give it rights to the countries where iTunes operates, which is now in 119 territories — many of those are countries that have no Internet radio service at all. Pandora, meantime, operates only in the US, Australia, and New Zealand.”

“For the music labels, the hope is not just that Apple lures people from Pandora — the company has a rocky relationship with the labels — but that iTunes Radio pulls millions of people from the FM dial over to streaming radio, a more lucrative place for the labels,” Sloan reports. “‘We’re hoping Apple shakes up the entire radio market,’ said one top digital music executive speaking on the condition of anonymity.”

Sloan reports, “That’s also Apple’s goal. In the runup to this week’s rollout, for instance, Apple has asked all the major music labels for their “heat seekers” lists, according to people familiar with process. Those are the lists the labels keep of artists and songs they’re betting are on the verge of breaking — even though the data might not yet point to success… Such collaboration is something that just doesn’t happen with Pandora, which doesn’t work with the labels beyond getting new music and data.”

Read more in the full article here.

MacDailyNews Take: If Pandora is “king” today, they’d better enjoy it. Their throne goes poof tomorrow with the public release of iOS 7 and iTunes Radio. The next, true king will make Pandora a pauper.

As we wrote this past weekend:

We’ve been using Apple’s iTunes Radio all summer long, since it first became available in the iOS 7 beta, and it has provided us, family, and friends with many hours of enjoyment — without a hiccup. It is extremely well-thought-out and executed; one of Apple’s very best, it’s a prime example of company at the top of its game.

We haven’t touched Pandora since the day we first launched iTunes Radio. This situation will soon be repeated by millions of iPhone, iPad, iPad mini, iPod touch, Apple TV, Mac, and Windows PC users.

The pain looming for Pandora will be intense, especially as it quickly becomes a ghetto for Android settlers who simply do not buy products in the way that Mac and iOS users do. Music labels will take note and act accordingly.

Upon general release with iOS 7 on September 18, 2013, iTunes Radio will become the #1 Internet radio service in the U.S. and, likely follow suit in every country in which it debuts.

Once the Apple steamroller arrives, Pandora might just as well rename themselves Pancake.

Related articles:
Apple’s iTunes Radio is going to put Pandora into a world of hurt – September 14, 2013
Anticipating customer surprise, Apple begins training support staff on iOS 7 and iTunes Radio – August 29, 2013
Pandora would be wise not to write-off Apple’s potent iTunes Radio – August 26, 2013
Apple’s iTunes Radio to debut in September with McDonald’s, Nissan, P&G, Pepsi sponsorships – August 21, 2013
Apple’s new iTunes Radio is designed to be the largest streaming radio service – July 13, 2013
Apple announces iTunes Radio – launches this fall – June 10, 2013

33 Comments

  1. To find glee in the possible demise of an independent developer who’s efforts helped advance the adoption and popularity of a platform is reprehensible and puerile. Shame on you, Mr. Wannabe.

    1. Shame indeed, JB; gloating over the pain or demise of an innocent party is ugly, juvenile and contemptible (the MDN eds in a nutshell.. or douche bag). And it makes Apple/Mac fans look shabby by association.

      1. That sounds extreme… But generally I don’t disagree.

        I thought Pandora WAS a great independent company that, much like Apple did when the iTunes Music Store was first being conceived, made a fair offer to the big labels in exchange for providing a fair service to users.

        I had always hoped that Apple would buy Pandora, after all I think they’ve touted the app several times in the past as the iPhone matured. But I guess it was cheaper, and simpler, just to make their own service. After all, Pandora’s market strategy and Apple’s are vastly different, despite being somewhat similar services.

        Unfortunately Pandora wasn’t doing ‘right’ enough for Apple’s high standards, and that’s usually when Apple decides to enter a market.

        The in,y shame is I doubt it’ll be any competition. 300 million devices will be using the service by the end of the year and Pandora’s penetration was never truly spectacular to begin with.

        Long story short, it is a shame, but it was inevitable and you really can’t blame anyone for it.

    2. I think Laughing_Boy48 sums it up quite well below.

      Had Apple been accorded the respect its undertakings deserved in the blogosphere and stock market, there’d be no impulse to take delight in the misfortune about to befall its competitors. However, the reality is that the bad wishes, FUDraking, and gloating against Apple have been and are incessant and deafening. Therefore, I can’t blame MDN or anyone else for enjoying the sweet success of yet another Apple endeavour.

  2. The hedge funds have been pouring their money into Pandora Media like there’s no tomorrow and the stock is at an all-time high. I’m pretty sure they’re not concerned about iTunes Radio harming Pandora. The institutions consider Pandora a sure investment that can’t possibly fail. Institutional ownership is around 100% and they’re certain Pandora has a far longer and better future than Apple. YTD, Pandora Media has gone up almost 175% while Apple has, of course, tanked all year long. Does anyone actually think the hedge funds are going to dump Pandora for Apple? I think not.

    /s

    1. I dissagree with you in a longer term time horizon. In about 6-9 months when Pandora is not only not profitable but growing in losses, they will dump it. Not to buy Apple though, but to buy Google or Amazon or Netflix.

      To bad it would not be profitable to buy long term puts on the stock, if the timing is off like I was with RIMM (BlackNblueBerry) then yet again I’d be right and wrong. This time I will be waiting until at least Jan to look at it.

  3. I like Pandora, but see no need for it now that I’ve started using iTunes Radio. It’s awesome. I like that it permits the phone to go into low power, but keeps the screen from turning off on its own.

  4. As I said before. I have a Pandora account, but I have used iTunes Radio far more. The quality sounds a lot better. And music discovery is pretty amazing. I heard songs here for the first time, before hearing them in mainstream media. I feel like I am on the cutting edge.

  5. Maybe it’s just me but I have the ability to enjoy more than one service. I welcome and look forward to iTunes Radio, but I also enjoy Pandora, Spotify, and MIXCloud on occasion. I get really tired of all the mindless zero sum predictions from dumb asses at places like CNET.

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