Pandora Media Inc. shares sank Monday on reports that Apple is closer to unveiling a competing service.
THE SPARK: Apple Inc. is pushing to complete licensing deals with music companies before it debuts a new Internet radio service, several media reports say.
Apple signed a deal with the Warner Music Group over the weekend for the project, according to the New York Times. The report also said that it is in talks with Sony Music Entertainment and Sony's separate publishing arm, Sony/ATV, for works by performers Taylor Swift and Lady Gaga. It has also signed a deal with Universal Music Group for its recorded music rights but not music publishing.
Apple spokesman Tom Neumayr said the company has no comment on rumors or speculation.
THE BIG PICTURE: Pandora already faces competition from Spotify and new services from Google, which launched a paid subscription music service earlier this month. Yet another competitor, particularly a big name like Apple, could be challenging for Pandora.
Apple's Internet radio service is expected to operate similarly to Pandora's, which offers free online access to users with advertisements. It also has a subscriber service that allows users to listen online without advertising. In February Pandora capped free listening on mobile devices to 40 hours per month to limit royalty costs and convert more listeners into subscribers.
SHARE ACTION: Down $1.94, or 11 .4 percent, to $15.08 in afternoon trading. The stock is up more than 64 percent this year.
- Professional Services
- Arts & Entertainment
- Sony Music Entertainment
- Warner Music Group