As expected, Apple strikes again! Apple Music, which was revealed last Monday, is giving Pandora a run for its money. Although this is not the first time Pandora has faced Apple threats (Ping and iTunes radio), investors are nervous that the third time may just be the charm. Mike Herring, Pandora’s CFO, is confident that, “This team [of more than 80 analysts, curators, and scientists with a musical background], combined with our technology, helps Pandora deliver a simple, personalized music experience that is unparalleled,” but we’ll just have to wait and see…
Pandora currently provides free internet radio with ads, or a subscription service with no ads. Apple Music is set to cost $9.99 a month. However, they are providing users with a free three-month trial, which, to many, is enough to initiate the switch. Apple believes that they will be able to drive their hundreds of million iTunes users to embrace the new subscription model, as they already have credit cards registered with the company. Apple Music, unlike iTunes, allows users to stream songs rather than buy them. This may persuade users to subscribe for about $10 a month rather than paying $10 to purchase an album. Due to Pandora’s narrow audience (U.S., Australia, and New Zealand), Apple is aiming at users outside of the U.S. who don’t have access to Pandora and could be potential candidates for the monthly subscription.
Apple isn’t the only one creeping up on Pandora. Google, Amazon, iHeartRadio and Sirius XM are appearing to cause a tight competition in this industry. But most importantly, Spotify is continuously increasing in popularity and is well on its way to topping Pandora’s 79.2 million users. Despite the fact that Pandora has the most weekly users out of the top music apps, it is not growing. Spotify, on the other hand, is growing fast and at a pretty steady rate.