Pandora investors shaken after Apple internet radio rumors strengthen
26th Oct 2012 | 22:17
Investors tuning out
Earlier this year, reports circulated that Apple was on the verge of launching its own streaming music service.
At one time it was believed Apple was readying the purported internet radio service to release alongside the iPhone 5, but the smartphone's launch has come and gone with nary a mention of such a program from the company.
In early October, rumors surfaced indicating the delay in the launch was caused by a dispute between Apple and Sony over the amount of royalties to be paid per stream.
Sources close to the matter at hand reported to the New York Post that Apple's potential plan wouldn't just serve tracks up based on algorithms like Pandora, but rather would push the tracks music producers wanted to promote.
It appears the delay was shortlived, and Apple's talks with the music industry have resumed, as investors in Pandora are rapidly abandoning the internet radio service at an alarming rate.
Pandora's stock fell 12 percent Friday, after the shares fell 13 percent to $8.08 (UK £5.02, AUD$7.80) on Thursday.
Since the rumors of Apple's own internet radio service began circulating in September, Pandora's stock has fallen 40 percent overall.
Vivendi SA's Universal Music Group, Warner Music Group Corp and Sony Corp's music division have reportedly visited with Apple in recent weeks, and a deal could potentially be reached as early as mid-November.
According to Bloomberg, Apple is eyeing a first-quarter 2013 launch for the service, which would be contingent on deals with music publishers being wrapped up quickly.
Despite the troubles Pandora is facing, Eric Brown, the company's vice president of communications, told Reuters, "We remain focused on our listeners and delivering the best internet radio experience for them."
Pandora already faces competition from services like Spotify, Sirius XM Radio and the just-launched Xbox Music, though Apple's close ties to the music industry could make it Pandora's biggest threat to date.
TechRadar has reached out to Apple, and will update this story if and when a request for comment is returned.
Until a more official announcement is made, investors and consumers alike will have to wait and see just what kind of potentially game-changing service Apple has in store.
From Reuters via Huffington Post