UPDATED: Apple To Launch Free Music Streaming In Early 2013, Pandora Stock Continues Fall
UPDATE: Pandora stock continued to fall on Friday morning, down another 3% to $7.96 as of 11:15 ET. Sources suggest that at least one major label is not eager to concede to Apple's requests and is seeking a substantial advance payment.
Apple is planning to launch a free ad supported Pandora-like online music service in the first three months of 2013. Current negotiations with labels are focusing on differentiating features and how to share ad revenue. The talks could be completed next month according to Bloomberg.
Pandora and other online radio services operate under a compulsory license that governs how many times per hour an artist can be played, as well as, how often they can skip tracks. Apple is negotiating direct licensing deals with labels that would allow more flexibility and additional features including offline caching and earlier availability of new releases.
Pandora stock, already battered by previous rumors of Apple's plans, fell another 111.73% on Thursday, down $1.09 to $8.20, off a 52 week high of $15,97.
While neither company would comment on today's report, Apple CEO Tim Cook has been beefing also up the company's mobile advertising group and exploring opportunities beyond radio to integrate ads within other Apple services.
More from Bloomberg:
11.73% not 111.73%
Since iTunes revenue contributes a substantial proportion of most record label’s digital revenues I guess Pandora won’t be the only company to experience a reduction in share price when Apple inevitably move towards streaming?
Whether the threat comes from Microsoft via Xbox or Apple via Itunes, Pandora faces challenges from new players in its space, competitors that have inherent advantages some might call unfair. The software industry coined a term for this kind of threat — “Russian Winter.”
While tech Goliaths like Microsoft and Apple are trying to dominate the online music space the true story is the trend; young people are opting to get their music in online streaming format.
As wifi and mobile phone plans experience Moore’s law it is only a matter of a few years before the mp3 goes the way of the dinosaur and vinyl. YouTube has long ago realized this and they are leveraging the fact with their API which has enabled websites like http://www.fuhshniZZle.com to build streaming apps around the YouTube API that are YouTube Music centric.
YouTube has cut deals with all the major players for revenue sharing and is courting new artists and becoming a viable alternative to the traditional label. We live in exciting times for multimedia and it will get far better as technology continues to obey Moore’s law.
I use apple products, however… I cannot stand apple from a business perspective. It’s the corporate vs mom n pop scenario. How does anyone expect us to move FOWARD with the new music industry when apple is here doing something pandora and spotlight started YEARS ago… And how come now that apple nearly announced the streaming service does the market for all other quality competitors go down? I’m no wiz at markets and statistics, I know apple is sitting on teens billions something in cash, good for them. But I’m willing to bet that spotify has a better platform for delivery. As an avid audiophile, I’d much rather pay $10 a month for streaming Spotify with no ads an the convenience then put another dime into apples pocket by listening to their ad ridden radio. Other people have good ideas, apple just markets them better.
What about Songza thats free and there are no ads at present ? Or even Iheartradio app which is also free and ad free
Are you sure that it is not 11.73% (fell another ->111.73% on Thursday)?
Vinyl? Vinyl sales are increasing every year.
I’m surprised an “avid audiophile” would listen seriously to Spotify, considering the low fidelity of the audio.
Having lived in Boca Raton for several years, listening to the 103.1 WIRK has become a daily ritual for me. I start my day with a cup of coffee and a side of the WIRK‘Morning Show’. WIRK is a stay at home mom’s best source for great entertainment. Tune in today or stream online at http://www.wirk.com!
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