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. I’ve been listening to iTunes Radio since early beta, and Pandora since shortly after it launched.

    Pandora is going to feel the launch of iTunes Radio, but unless Apple radically changes its focus, Pandora should be fine (unless they suffer other problems).

    If Apple maintains iTunes Radio as a value-add to sell hardware, then Pandora will lose most of their Apple using customers. However, many, like me will stay with Pandora in addition to iTunes Radio because the it’s free or dirt cheap for the premium version and having additional sources can be a good thing. So far, any genre or custom station in one is much different than the other, and while consistently better in iTunes Radio, it’s nice to mix things up a bit from time to time.

    But more importantly, as long as Apple doesn’t turn iTunes Radio into it’s own business unit focused on it’s on P&L, then it’s unlikely to license iTunes Radio or develop apps for other platforms, like Sonos, Android, Windows, Playstation, Wii, Xbox, and a whole bunch of TVs, set-top-boxes, car stereos, and other devices. Currently, Pandora is available on pretty much all of these things from all vendors.

    TL;DR: Apple devices will have iTunes Radio, and it will be the dominate smart radio player on Apple platforms. Non-Apple device users will have the “It has Pandora, it’s like iTunes Radio”, and likely never know/acknowledge what they’re missing.

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