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Will iTunesRadio Be Pandora’s Poisonous Apple? | The Radio Agency | www.radiodirect.com

Will iTunesRadio Be Pandora’s Poisonous Apple?

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October 8, 2013
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October 22, 2013

Will iTunesRadio Be Pandora’s Poisonous Apple?

Slacker, Spotify and countless other services have tried, buzzing Pandora’s 800 lb. gorilla like pesky airplanes in the original King Kong movie.  And still, Pandora has survived and thrived, sporting 72.4 million unique, weekly listeners by their latest count.

But now Apple’s iTunesRadio has stepped into the ring.  And spectators, investors and industry insiders are wringing their hands in anticipation of the Main Event showdown.

Unlike the time Internet giant Google entered the radio space briefly with its ill-fated takeover of dMarc to create Google Radio, iTunes enters this space with deep roots in music and 67 million iTunes users.  It just so happens that 42% of those iTunes users are Pandora users.  So it’s safe to assume that iTunesRadio will siphon off at least some percentage of Pandora’s listening hours.

The iTunes music library runs 27 million songs deep, compared to Pandora’s one-million-song universe.  And while most of those 27 million songs have little mass market recognition or demand, that broader collection may appeal to Pandora users that complain of repetitious playlists and yearn for more variety and depth by artist.  iTunesRadio will provide that, along with the ability to customize the styles of music played on your playlists much like SiriusXM allows Internet users to tweak their listening experience to hear more of the styles, tempos and flavors they crave.

Pandora has the leverage point of being the incumbent, currently with more Internet listeners than all of its rivals combined.  It will take an evenly-matched heavyweight to chip away at its early, cavernous lead in the online music space.

Out of the gate, iTunesRadio claimed over 11 million listeners in its first week, rocketing the service ahead of many of the second- and third-tier players, simply by flipping the “On” switch.

Radio Business Report Editor-in-Chief Dave Seyler wisely notes that iTunesRadio doesn’t have the same, urgent pressures for profitability that Pandora faces; with Wall Street analyzing Pandora’s every move.  He notes that Apple might even choose to view iTunesRadio a pet project with no need to yield independent profitability.  After all, iTunesRadio listeners have the ability to click-to-buy any song they hear on the radio service, which takes users to – you guessed it – the iTunesStore and a chance for Apple to ring the register on a music purchase.

That enviable position puts Apple in a place where it can simply exist and be an ever-present thorn in Pandora’s paw.  Should Pandora’s kingdom one day collapse from the pressures of offsetting revenues against music licensing fees, Apple would be well-positioned to claim the throne by default.

Today, iTunesRadio doesn’t appear likely to replace Pandora or even topple the Internet radio leader anytime soon.  But, nor does it seem likely that iTunesRadio will accept second-tier status and would seem likely to fortify its product as its Beta testing of the service leads to more updates, upgrades and a more rewarding listening experience.

The big winner in all of this is anyone who ever wanted to program their own larger-than-life jukebox, hungry for new ways to enjoy their favorite songs and discover new ones.  Internet radio is here to stay.

Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website TheRadioAgency.com