Pandora stocks tank on rumors of Apple streaming service

The rumor mill is starting to heat up with stories that Apple is planning to launch an iTunes-based streaming service to take on Pandora and Spotify, and it’s already struck a major blow against Pandora, whose stock dropped by 17% today. The streaming scene could be about to get even more interesting.

Some investors have been skeptical about Pandora’s prospects ever since it went public last year, and Spotify’s entry to the North American market only reinforced those concerns. If Apple really is planning to burst into the crowded market, they’ve got even more reason to be skittish. The fact that the Wall Street Journal says that an Apple streaming service would look more like Pandora than Spotify doesn’t really help things.

Apple has apparently been negotiating with record labels to launch its service, although it’s not this first time they’ve considered diving into the market. Rumors like this have been cropping up for a while now, but apparently it’s different this time. It makes perfect sense that they’d want to get into the market, lest it catch them by surprise. By leveraging their popular mobile platforms and huge head start in the music business, Apple might well be able to craft a powerful competitor to established streaming businesses.

"They are the biggest threat out there," Capstone Investments’ Rory Maher told Reuters. “They have quite a bit of leverage through iTunes.” And while that’s definitely got some analysts and shareholders worried, others see light at the end of the tunnel: “Why wouldn’t Apple want to leverage Pandora’s ad business?” Albert Fried and Co’s Rich Tullo asked. “Pandora is a great content acquisition.”

For all we know, Apple could’ve already approached Pandora about making that a reality. Or they could be totally unenthusiastic about that prospect. Regardless, if Apple does enter the market, Pandora is going to find itself in an even tougher position than where it’s at right now.

As Apple consolidates the services that surround its iOS platform, competitors (even if they have previously had a close relationship with Apple, like Pandora and Google) are bound to start to feel a squeeze. After all, why should customers bother with third party apps when Apple offers everything they need?

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30 Comments

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I LOVE PANDORA! I hope Pandora figures something out real quick! Like put more music on their Stations than the 10 same ol' songs.

Apple news on this site is poking monkeys in a cage with a cattle prod. RARRRR, raagggee!

Anyway, as long as it's better than Spotify, willing to give it a go. Been with them since the beginning and the odd licensing laws meaning tracks available to certain regions only gets annoying, meaning you randomly end up with cover versions. Apple would have the clout to remove those restrictions in their service. Plus the Android/iOS app from Spotify is horrid.

Oh my goodness! An apple rumor did something. I'm going to say something that is over dramatic and pointless too!!

laserfloyd said,
Hey Pandora, get to work on the Win8 app already.

Agreed. WinPhone 8 app and Win 8 app. Microsoft just needs to hostile take over Pandora... That would be a brilliant business move for them but they also need to not change how Pandora operates.

I wish Pandora would be available globally again. all the other "radio" services are utter crap. Spotifys excuse for pandora like radio stations is a joke. you can put in a rock band and it'll start playing disco ffs.

Well seeing as it seems to be mostly people griping about Apple, I'll say "good for Apple" and I'm all for competition. Besides, this would presumably only be available for iPad / iPhone users so wouldn't be of any use to the millions and millions of Android customers, as well as those on other platforms.. so stuff like Spotify should continue to thrive (which I am a paid up, premium user of and have been for about 2 years!).

I see no reason to be worried about Pandora. I am pretty sure apple would require you to pay for the service, whereas Pandora is free. Apple would not likely let users listen to free music.

Nazmus Shakib Khandaker said,
I see no reason to be worried about Pandora. I am pretty sure apple would require you to pay for the service, whereas Pandora is free. Apple would not likely let users listen to free music.


look at what apple did with the ebook market....they dont have to offer free to destroy competition and raise costs.

Nazmus Shakib Khandaker said,
I see no reason to be worried about Pandora. I am pretty sure apple would require you to pay for the service, whereas Pandora is free. Apple would not likely let users listen to free music.

If you look at the Wall Street Journal article, it's supposedly going to be based around iAds. Of course, it's just a rumor...

Nazmus Shakib Khandaker said,
I see no reason to be worried about Pandora. I am pretty sure apple would require you to pay for the service, whereas Pandora is free. Apple would not likely let users listen to free music.

While I somewhat agree. Apple is going to require you use iTunes garbage to listen where Pandora is purely web based. I despise iTunes with a passion. Anytime I cannot just plug in a device via USB and drag and drop things via a native file browser I find to be bloated over kill software.

Companies like pandora and google who offer services and refuse to make available I have no sympath for. This why I love amazon. They are a content company, like pandora and google, who give people a way to consumer or use their services & products.

gullygod said,
Companies like pandora and google who offer services and refuse to make available I have no sympath for. This why I love amazon. They are a content company, like pandora and google, who give people a way to consumer or use their services & products.

Simple question: What aren't they making available to you or others?

Pam14160 said,

Simple question: What aren't they making available to you or others?

maybe he/she lives in a region that has legal issues, sort of like spotfy needing to over come those before they were able to release in the usa.

Pam14160 said,
The only thing I see happening is more lawyers getting richer.

Well, sombody has to make some cash out of this!

ChrisJ1968 said,
This just makes me sick. apple is just a nasty thug on the block. can't stand them. Apple is just a freakin mess

So, assuming that the rumors are true, why would Apple would be a nasty thug for entering the streaming market? I don't see the wrong there.

THolman said,

So, assuming that the rumors are true, why would Apple would be a nasty thug for entering the streaming market? I don't see the wrong there.

because apple has an entire ecosystem to leverage against Pandora and other streaming services, because apple has (for massive reasons i don't understand) extreme mind share at their command, because they will integrate this into their products, just like Microsoft did with IE.

i would be perfectly fine with this if apple had government oversight like Microsoft had, because i don't trust those SOB's. anytime apple enters a market, things become for expensive and more locked down.

jorel009 said,
anytime apple enters a market, things become for expensive and more locked down.

WRONG. The iPhone actually made smartphones CHEAPER. You used to have to pay ~$350 to get a Windows Mobile phone with a contract... post-iPhone it's now $200 or less.

andrewbares said,

WRONG. The iPhone actually made smartphones CHEAPER. You used to have to pay ~$350 to get a Windows Mobile phone with a contract... post-iPhone it's now $200 or less.

Fail, the cost came down naturally... the actual cost of iphone over smartphones at the time was laughable and thats before 18-24 month contracts became the norm (thanks iphone).
You obviously to young to remember when the mobile came with the contract for free (and yeh it was a smartphone)

ChrisJ1968 said,
This just makes me sick. apple is just a nasty thug on the block. can't stand them. Apple is just a freakin mess

So competition isn't good for the consumer then?

andrewbares said,

WRONG. The iPhone actually made smartphones CHEAPER. You used to have to pay ~$350 to get a Windows Mobile phone with a contract... post-iPhone it's now $200 or less.

Phones are subsidized by your carrier which is what brought down prices. The retail price on phones is still exactly where it was 5 years ago. 499 to 799

Thanks for hating today...

ChrisJ1968 said,
This just makes me sick. apple is just a nasty thug on the block. can't stand them. Apple is just a freakin mess

Thanks for hating today...

jorel009 said,

because apple has an entire ecosystem to leverage against Pandora and other streaming services, because apple has (for massive reasons i don't understand) extreme mind share at their command, because they will integrate this into their products, just like Microsoft did with IE.

i would be perfectly fine with this if apple had government oversight like Microsoft had, because i don't trust those SOB's. anytime apple enters a market, things become for expensive and more locked down.