Apple Creates Shake-Ups between Music Company Veterans
Posted by jodi in K news
Apple’s potential entry into internet radio is poised to put online music pioneer Pandora Media on the takeover wish lists of companies from Google, Amazon and Clear Channel Communications.
Pandora is projected to increase revenue by 214% (yes, you read that correctly) in the next two years, which is almost 3 times the average for U.S. internet media companies valued at more than $1 billion, according to data compiled by Bloomberg.
Pandora sank 17% at the beginning of September, amid speculation that Apple will introduce a rival service. Should Apple do so, that may compel Google or Amazon to snap up Pandora’s 150 million registered users to offer the service on mobile devices. Radio-station owner Clear Channelâ€™s interest poses another possibility as listeners and advertisers shift to online media.Â
Clear Channel has been marketing its own internet radio service, iHeartRadio, hosting the iHeartRadio Music Festival in Las Vegas in September, with performances by artists including Taylor Swift, Rihanna, Aerosmith, Usher, Bon Jovi, Lil Wayne, Green Day, Pitbull, Miranda Lambert and Enrique Iglesias.
However, Pandora already has the edge on users. It represents 74% of online-radio listening, and its share of all U.S. radio use has climbed to 6.3% from 3% a year ago, Dominic Paschel, the company’s VP of corporate finance and investor relations, stated. “That essentially makes us the largest station in most of the top 10 markets,â€ť he said. â€śWe anticipate being the number 1 radio station in pretty much all of the top 180 markets by the end of the year.”
Analysts admire Pandora’s scale. “When you look at the value of Pandora to another company, it’s the infrastructure they have created, it’s the advertising business, the success with mobile,” John Rudolph, a Senior Adviser at Siemer & Associates, said. “Pandora has such a big installed base and such a huge number of users, there’s value in that.”
Mollie Starr, a spokeswoman for Pandora, declined to comment on the potential for a takeover. So did representatives at Amazon, Google and Clear Channel.Â
Pandora, which offers both paid and advertising-supported services, also generates more revenue from mobile-device ads in the U.S. than every company except Google, according to data compiled by eMarketer.
The status for potential take-overs and shake-ups are expected to known in a brighter light by the end of the year.
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