Pandora spooked as Apple looks to enter the digital radio market

Pandora spooked as Apple looks to enter the digital radio market

Pandora sure was relieved last week when the major announcement Apple made to the public was about the new iPad mini, and not about their rumored entrance into the realm of digital radio. Apple has apparently been in talks with the major labels to sort out revenue deals in preparation for rolling out a new radio service in the vein of Pandora sometime early in 2013. Bloomberg is reporting that the new Apple radio service will be uniquely Apple-like in the following ways:

• App-based, vs. web-based
• License holders will get a share of advertising revenues in addition to an up-front fee for usage, and will be able to insert their own artist-promoting ads into Apple radio ad spaces (similar to what you see on Spotify)
• Advertising will direct users to iTunes for music purchases
• Songs heard on Apple commercials will be played once an hour on all stations and playlists, regardless of if they are genre-relevant

Even though the service is still on the horizon, things aren’t looking great for Pandora. Their share price fell 17% after initial news of the Apple-radio venture broke (also by Bloomberg News), and only increased a tiny bit after the lackluster October 23 announcements from Apple. Even though Apple is making the move into radio primarily to increase advertising revenues on mobile platforms — a tricky spot on the current marketing landscape — this could still be the kind of seismic event that leaves lesser players devastated in its wake. Everyone knows a slew of people who are Apple fanatics, but you’d probably be hard-pressed to find anyone who is as in love with their Pandora subscription as they are with their iPhone.

• Pandora: