Reports that Apple is preparing an Internet streaming-radio service fed a plunge in Pandora Media’s stock price Thursday — 9 percent to hit a record low of $7.50 before finishing the day at $8.20. That’s a far cry from the company’s $16 IPO price in June 2011.
It might be premature to call 2012 Pandora’s annus horribilus, a lot can change over the next two months and 2013, when Apple’s music streaming service is expected to launch, could prove things much worse.
According to Bloomberg, Apple has “intensified negotiations” with major music labels to start an Internet radio service next year, though neither Apple nor the labels have confirmed this report. The news service said the service will be ad-supported, which puts it in direct competition with Pandora, who’s already facing increased competition from a whole swathe of new competitors.
Apple’s market presence would obviously be a lot more significant. Aside from its rabid fan-base and deep pockets, Apple has iTunes and all of the industry connections that come with it, and that’s what will determine the size of the music library once Apple opens the doors to the service.