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  • Despite Losing Nearly 2M Active Listeners, Pandora Withstands Apple's iTunes Radio

    Pandora’s chief financial officer, Michael Herring touted the company’s resilience in the face of Internet radio newcomer Apple, saying that listening hours were up 8% in October despite the loss of some 1.8 million active users. Although 1.8 million people may seem like a large number, for Pandora, which counted 70.9 million active listeners in October, the fluctuation is in line with the company’s forecast for the month according to Bloomberg.

    By comparison, Apple said 11 million people tried out iTunes Radio after it was first released. Speaking at the recent iPad event on October 22, Tim Cook noted that Apple’s radio service boasted 20 million users who played a collective 1 billion songs.

    As far as Pandora goes, listening hours actually grew 9% during the month in which iTunes Radio launched. According to Herring, Pandora’s share of the US Internet radio market stood at 8.06% at the end of October, up from 7.77% from the previous month. Herring had the following to say regarding the matter:

    October data was in line with our expectations and showed the resilience of our business.
    A number of reasons are said to be contributing to Pandora’s continued growth. In a survey taken in October, 92% of iTunes Radio listeners said they still use Pandora. Many reported either going back to the service after trying out Apple’s offering or simply switching between the two. Alternatively, listeners may have been swayed by Pandora’s decision to lift a 40-hours-per-month listening cap for free users – a change which was implemented in September.

    Before Apple’s iTunes Radio launched on September 18, Herring called the service a “credible threat” but appeared to be upbeat about Pandora’s continued dominance in the sector. Pandora is currently looking to expand its operations beyond the US, Australia and New Zealand in the future and could use some of the nearly $400 million raised in a September stock offering for that purpose. The company continues to make preparations for international music licensing and royalty agreements, which in some countries called for upfront payments.

    Apple’s iTunes Radio on the other hand is currently limited to the US, though a recent job listing for a content programmer hinted the service may soon arrive in Canada.

    Source: Bloomberg
    This article was originally published in forum thread: Despite Losing Nearly 2M Active Listeners, Pandora Withstands Apple's iTunes Radio started by Akshay Masand View original post
    Comments 6 Comments
    1. Christophxr's Avatar
      Christophxr -
      In line with what's already mentioned in this article, I'm sure the vast majority of Pandora users that are now also using iTunes Radio aren't saying, "I'M NEVER GOING TO USE PANDORA AGAIN!!" For free services like this, changes happen slowly but surely.

      Michael Herring may be acting as though he's not concerned (whilst still acknowledging the existence of the competition, all perfect little attitudes and games for shareholders), but he probably not only realizes this, but is hoping beyond hope that his company comes up with some way to not slowly delve into irrelevance over the coming years. I'm not saying, "Yeah, iTunes Radio is totally going to destroy Pandora," but the reality that that just may happen is there.
    1. NewD's Avatar
      NewD -
      iTunes Radio will never shove Pandora out. They're 2 entirely different interfaces and don't even remotely resemble each other. Pandora's design is way more elegant and it's "radio station" concept's predictive algorithm is way better than iTunes at this point. Apple is a newcomer at this. And just like Bing would love to believe it's a "real contender" up against Google.. no way. iTunes radio is to Pandora what Windows phones are to iPhones; a non-contender... for now...
    1. buggsy2's Avatar
      buggsy2 -
      Because iTunes Radio sux badly.
    1. Sage I's Avatar
      Sage I -
      I am using both pretty equally... I was using pandora 40+ hours a week before I got a 5s and was on iOS 7... Once I gave up my jailbreak and my pandora downloader tweak things changed... I spend a lot of time in my music app and so now when I'm looking for what to play and I'm unsure iTunes Radio to the rescue... It's easy to choose that cause it's integrated in...
    1. thetoothfairy's Avatar
      thetoothfairy -
      I like iTunes radio myself. They play all the songs I enjoy! I have had the Pandora app on my iDevices since it came out and only opened the app twice. Since iTunes radio came out I listen daily!
    1. bigboyz's Avatar
      bigboyz -
      In the end iTunes offers the users more. Options to buy a song is just one. In the end its your preference. Yet...I feel one of them will have to offer something a bit more to really keep a so called "loyal" listener.