How Apple’s media ambitions will kill off Sirius XM and Pandora

In a statement yesterday, “Tim Cook reminded everyone why Apple acquired Beats. While discussing the realm of music streaming and an ability to both monetize and reward artists, Cook said of Beats, ‘they’re the only ones that got it right.’ And it is for this reason (among others) Sirius XM and Pandora should worry today,” Wall Street Playbook writes for Seeking Alpha. “For Pandora, the impact will be felt immediately. After a decade in existence, Pandora still has not shown investors that it can make any money. Despite its lead, the company has been riddled with deteriorating profits. In fact, even though Pandora’s revenue has steadily risen, there has also been a clear deceleration in active users. Even worse, artists, with whom Pandora has fought over payments, now has Apple to align themselves with.”

“Apple has offered to pay artists twice what Pandora pays, while also offering to share a portion of ad revenue. So contractually, an Apple/Beats union will eventually kill off Pandora. For Sirius, however, the impact will be felt much slowly. This is because, aside from the fact that Sirius makes money, Sirius offers more than just music. But Apple has also begun to address this,” WSP writes. “Recall, back in March, Apple announced that it had added the NPR channel to iTunes Radio… [and] on Wednesday, Apple also introduced a new ESPN station for iTunes Radio. The station will include original ESPN programs like SportsCenter All Night, SVP and Russillo, The Herd, and Mike & Mike. According to 9to5Mac, the ESPN station will also stream of the World Cup, making it the first live sporting event to be streamed live through iTunes Radio. Note, Apple also added 42 local NPR stations. Isn’t this the sort of thing Sirius prided itself on?”

“With Apple’s cash and its obvious desire to become a media company that specializes in content, it’s only a matter of time before Apple begins discussions with popular channels like CNBC, MSNBC, FOX News, Bloomberg and so on,” WSP writes. “And once the NFL, NBA, Major League Baseball and NASCAR enters the mix, it’s game over for Sirius.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Bill” for the heads up.]

Related articles:
Can Apple win over a music industry burned by Pandora? – May 27, 2014
Pandora CFO: We can extend our lead in online music – May 20, 2014
With Beats, Apple can succeed where Pandora has failed – May 16, 2014
Pandora just killed itself – March 25, 2014
Pandora raises fee for ad-free streaming radio – March 19, 2014

18 Comments

  1. So many clues and so little insight. Not once here or today has ANYONE discussed CarPlay. You would think the questions “why now” or “what new markets is Apple going to dominate with this purchase” would come up. They can’t see billion dollar server farms all around the world to stream from, with what new services, and to what new media hub or entertainment systems. CarPlay and Smart Home standards are bigger than these short sighted knowledgeable big thinkers can understand. These are the big thinkers that understand Apple? Really! Think bigger. “Think Different.”

  2. To kill Sirius, Apple would have to address the issue of data. Since their model is based on streaming of content, that will require a data connection – which is not always available, and costs considerable money (especially when you go over your allotted budget of Gbs). Until Apple controls a worldwide WiFi system for delivering that streaming content, I don’t think Sirius has anything to worry about.

    I am an avid Sirius subscriber – and while I do listen while at home through my Sirius APP, the majority of my time listening to Sirius is done in my vehicles while driving throughout the day between meetings for my job. Mobile data needs to be addressed before iTunes Radio can provide any form of competition to Sirius.

      1. Most, sure, but not me. Sirius gets the nod for some of us because we’re so rural that there is very little choice in radio. Forget data. The signal is dead as a doornail on my daily commute.

        Still, agreed, for most people that is a good option.

          1. Which completely negates the “live” portion of NPR, ESPN, CNN, Fox News, etc. If I have to load up my iPhone to listen to something while driving, it’s already got an iPad app, I don’t need iTunes Radio or Beats to do that now.

  3. Wow. Where have all the editors gone?

    Let me fix a few spots there for you, SeekingAlpha.

    “…artists… now *have* Apple to align themselves with.” would be accepted by most. “…with whom to align themselves.” would be better. Certainly not “artists… has…”

    “For Sirius, however, the impact will be felt much *more* slowly.”

    “the ESPN station will also stream -of- (deleting ‘of’) the World Cup”, or “the ESPN station will also *provide a* stream of the World Cup”. Not “will also stream of”.

    “And once the NFL, NBA, Major League Baseball and NASCAR enter the mix, it’s game over for Sirius.” Not they “enters the mix”.

    I try not to be a grammar Nazi, but that’s a lot of mistakes in a short space. I’m not registering to read the original, but it seems likely all copied and pasted in proper context, so the mistakes aren’t MDN’s.

  4. Why Apple will fail at radio streaming:

    Apple will only provide liberal content and ignore/blacklist conservative content. Liberal content has failed time after time.

    Liberals only want free stuff…

    1. Interesting… As a tech company, they are one of the conservative ones. But as a political mover/shaker, you are correct that they are liberal. Interesting.

      I don’t think they would do what you suggest, but still… interesting.

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