Apple Going Toe-To-Toe With Pandora In 2013

Senior Contributor
10.26.12 5 Comments

Today in “Apple trying to make its ecosystem even more insular than it already is” news, Apple is going to get into the Internet radio business. Why? Because everyone else is, of late. But, needless to say, Apple might have a bit of an advantage.

Yeah, they’re late to the party, but they own the biggest music store in human history, and they might be looking to leverage that a bit:

With sales of music downloads slowing, Apple and record companies want to create new ways for customers to discover and buy digital music. To challenge Pandora, Apple is seeking licensing pacts with labels that allow more flexibility about what listeners hear. Pandora, the Internet radio leader, relies on a compulsory license that limits how often users can skip tracks and how many times an hour an artist can be played. Apple is also pushing for earlier access to new releases.

I’m skeptical the business is slowing that much: In 2010, Apple had sold ten billion songs since 2003 and in 2012, it had sold twenty billion. “Doubling your total sales in two years” is a pretty strong measure of success. That said, there’s now a lot of competition in the music market. Google is selling music, although the prices are still terrible, and Amazon is likely nipping at Apple’s heels. Hence, Internet radio makes sense.

Unsurprisingly, the rumor is this will be an iOS app, not a browser-based streaming application. Needless to say, it’ll be ad supported. You also may be able to buy “music streams” instead of downloading a song, although it’s not clear whether that would be instead of Pandora’s skip function or a separate feature.

Either way, we’re pretty sure Apple will introduce something interesting, if nothing else. They’ve got the leverage to make the music industry do their bidding, so what that will result in should be fun to hear.

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