When rumors of Apple’s (AAPL) online radio service first leaked last year, shares of market leader Pandora Media (P) took a dive. But the reality of Apple’s iTunes Radio has been much less damaging for Pandora, at least so far. Pandora shares hit a new all-time high of $28.36 during trading on Nov. 12 before closing at $28.24. With all of Apple’s popularity and marketing might, how can that be?
- iTunes Radio is attracting mostly less valuable, casual listeners
Online radio, like regular terrestrial radio, is mainly an advertising play. And that means the more hours a user listens, the more valuable that user is to Pandora. So it’s good news for the company and its shareholders that the audience for iTunes radio appears to be drawn mainly from the more casual segment of the audience.
Apple has said 20 million customers listened to 1 billion hours of music in the first month after its new service went online. After modelingRead More »from How Pandora Is Beating Apple’s iTunes Radio