Pandora Media’s down 7.7% this afternoon after CNET reported that Apple is “close” to enlisting Universal Music and Warner Music for an iTunes-linked streaming service. Apple would make it easy for users to buy songs that they like, and would share as much as 45% of the revenue from the ads it sells on the service. That appeals to the music companies even though they’d collect less for each stream than they do from Pandora. Apple wants to strike licensing deals with Sony Music, music publishers and others in time to introduce the service this summer in the U.S. as well as the UK, France, Germany, Australia, and Japan. Last month Pandora CEO Joe Kennedy startled investors by announcing that after a decade at the helm he plans to leave the company after it picks a successor. The stock is up 39% so far this year.
This could give Spotify a huge boost in its competition with Pandora and others to become the dominant streaming music provider for Web users. Although the announcement from the companies is short on details, it says that …
Even if you don’t have Spotify on your computer or smartphone screen, you should put it on your radar. Music execs tell me that the streaming service, introduced in the U.S. last July, is beginning to break from the pack of digital music providers which includes Pandora, Rdio, Rhapsody, MOG, and Slacker. ”The big question is whether it will become the iTunes of the streaming media market,” one tells me. Credit Suisse’s John Blackledge took note of Spotify yesterday in a 63-page report initiating coverage of Pandora Media, which offers a radio-like streamed service. “There is a lot of discussion and buzz around Spotify,” he says noting that it is “looking to siphon market share” from some of the giant sellers of downloaded music including iTunes and Amazon. Spotify has about 10M active users worldwide. (The company won’t break out the figures by country.) The vast majority use its ad-supported, free service which — in the U.S. – offers unlimited access to its library of more than 16M songs including tunes from all four major recorded music companies: Universal, Sony, Warner, and EMI. (No Beatles, though; iTunes has exclusive online rights to the group’s catalog.) The company’s goal, though, is to nudge users into paying for a subscription. About 3M people pay either $4.99 a month (for unlimited, ad-free streams to computers) or $9.99 (for unlimited, ad-free streams to mobile and digital devices as well as computers, and the ability to download songs for off-line listening). Users can listen to specific songs on demand, or let the service create playlists based on a particular performer or other criteria. While other companies offer similar services, execs say that Spotfy one of the easiest to use — and integrates well with Facebook, where users can share songs, playlists and recommendations. Indeed, only Facebook members now can sign up for Spotify.
EL SEGUNDO, Calif.– DIRECTV (NASDAQ: DTV), one of the world’s leading providers of digital television entertainment services, and Pandora (NYSE: P), the leading personalized radio service, are now giving customers unlimited access to personalized radio stations that play only the music they love from the comfort of their homes. Customers can easily search for their favorite artists, songs or musical genres and create personalized radio stations by using DIRECTV’s new 1080p HD Guide, one of the industry’s most intuitive and sophisticated HD on-screen guides.
UPDATE, 2 PM: The market deteriorated as the day wore on, continuing the worst market slump since 2008. The Dow Jones U.S. Broadcasting and Entertainment Index closed down 7.3% — exceeding the 5.6% decline in the Dow Jones Industrial Average, 6.7% drop in the Standard & Poor’s 500, and 6.9% fall at NASDAQ. CBS’ -10.3% slide made it the leading loser among media’s Big Guns. It was followed by News Corp (-7.7%), Viacom (-7.1%), Comcast (-6.6%), Sony (-6.4%), Disney (-6.1%), and Time Warner (-5.8%).
Double-digit losers include AMC Networks (-12.8%), LIN TV (-12.7%), Sirius XM (-12.7%), RealD (-12.6%), Cumulus Media (-11.9%), TiVo (-11.4%), Entercom (-10.9%), Westwood One (-10.8%), and E.W. Scripps (-10.3%). Those losing at least 9% include National CineMedia, Dish Network, Arbitron, Sinclair Broadcasting, Rovi, Outdoor Channel, Crown Media, Electronic Arts, Cablevision, and Coinstar.