Will Apple's iTunes Radio stop the music for Pandora and Sirius XM?
Apple’s entry into streaming music, iTunes Radio, hit the market by storm last week when it launched along with the new mobile operating system, iOS 7.
In the last five days, 11 million users tuned in to iTunes Radio. Tech site CNET notes that at that rate, iTunes Radio could overtake the leading streaming music company, Pandora’s nearly 65 million unique monthly users.
|Service||Users in millions (subscribers or monthly)|
Pandora’s stock has had a fantastic year, to say the least. Until the launch of iOS 7 and iTunes Radio, Pandora just about tripled its value since the start of 2013. But since the start of the week, it’s down over 5% after it said its growth is slowing and with news of iTunes Radio’s early success.
Meanwhile, Pandora’s outer space rival, Sirius XM, also took a hit this week. The satellite radio company lost more than 2% since opening on Monday. Like Pandora, this year was being very good for Sirius XM; its stock had been up 37% from January until iTunes Radio’s launch.
Sirius XM’s market cap is $23.8 billion while Pandora’s is $4.5 billion. Their combined total of $28.3 billion is just two-thirds of the cash Apple is sitting on. The two streaming companies’ combined annual revenue of $4.1 billion is about what Apple makes in less than nine days. Financially speaking, everything these two companies have is the equivalent of what Apple finds in its sofa cushions.
So, will iTunes Radio put an end to the likes of Pandora and Sirius XM?
(Watch more: Will Pandora survive despite Apple's iTunes Radio?)
CNBC contributor Andy Busch, author and publisher of the Busch Update, takes a look at the fundamentals of these two companies. On the Pandora’s charts is Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grasyon. He looks at the company’s recent run-up in price and looks at the warning signs ahead.
Will Apple’s iTunes Radio kill the streaming music stars? Watch the video above to see Busch and Ross analyze Pandora and Sirius XM and decide if it’s time to tune out these stocks.
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