Thursday 6 December 2012, 11:10 | By CMU Editorial
Apple iStream not likely soon, but Pandora share price still falls
While it was reported back in September that mega-publisher Sony/ATV had reservations about Apple’s proposal for moving iTunes into the streaming music space, we noted at the time that the major record companies weren’t yet showing much enthusiasm either for iStream (or iRadio, as Apple seems more likely to brand any such service).
And C-Net now reports that Sony, Universal and Warner Music all remain unimpressed by the IT giant’s pitch for moving the market-leader download store into the streaming space, which basically means Apple isn’t currently offering attractive enough financial terms for licensing such a service. As previously noted, Apple isn’t generally that keen on investing its own cash upfront when licensing content, and most streaming services initially launch with a loss-leading strategy. All of which means we are unlikely to see an iRadio button added to iTunes anytime soon.
Which is good news for the other streaming music platforms, most of whom fear Apple becoming a head on competitor, given the IT firm’s large share of the wider digital music market. And not least Pandora, whose share price always wobbles when rumours of an imminent Apple streaming service launch do the rounds.
Not that the Pandora share price needs any such rumours to wobble at the moment. Despite the streaming music firm reporting a $2.1 million profit for the last quarter, compared to a loss of $7.9 million in the same period last year, Wall Street did not respond well to Pandora’s latest financial announcement, because of a prediction that revenue growth would slow in the next quarter returning the company into a loss.
Pandora, of course, is hoping to make itself more profitable by cutting the amount of royalties it has to pay to the labels and publishers, a move that has not impressed the music business or artist community.