Pandora CFO Sees iTunes Radio as 'Credible Threat', Calls iTunes 'Detrimental' to Music Industry

by

pandora_newlogo Pandora CFO Mike Herring this week made several comments about Apple's iTunes Radio service in an interview with CNET. The executive addressed on a number of topics, including how he sees competing music streaming services as viable threats, the issues surrounding artist pay by streaming services, and the current state of affairs for all streaming services for paying artists.

When asked what makes the company believe a competitor like Apple isn't a threat to Pandora, Herring acknowledged that Apple is indeed a threat but that it is just one of many high-profile services to enter the market.

It's not that it isn't a threat to Pandora. Don't get us wrong, we take them very seriously and do see them as a credible threat. Keep in mind there have been lots of credible threats over the years, from startups to Microsoft to Google, to Apple and Twitter this year. We absolutely see iTunes as a competitive option out there, but we think we are a great service that does this better than anybody else. The most recent entrants have all been large, well-funded companies that have agendas outside a really awesome music experience. They have other reasons, selling cell phones or downloads. We sell downloads, but the priority isn't to sell as many downloads as possible. It's emblematic of the difference.

Herring was also asked about how Pandora pays lower rates to music labels than Apple because of his company's choice to pay according to government guidelines instead of direct deals:

It's not about lowering rates -- that's about creating fair rates across lots of distribution channels. We've put offers on the table where we commit to paying no less than we pay now in absolute dollars, and with increases on an annual basis. That hasn't gone anywhere because of a lack of trust. It has created a situation where meaningful conversations for positive outcomes are going to be hard-fought wins. It's going to take a long time to get there.

The executive also expressed his feelings about how Apple's iTunes Store has been detrimental to the music industry by breaking down the traditional CD business.

One of the arguments against Pandora is that we're trying to pay artists less money. We'd like to see artists get paid more. We also understand the mistrust comes from a pretty tough decade-plus in the music industry. First you had the piracy issues, which are still rampant, mostly internationally but also domestically. And you had the download platforms, specifically iTunes, that disintermediated the entire CD business, which was detrimental. There's difficulty for people who have experienced these negative things to listen to reason.

Pandora CEO Joe Kennedy stated last month that the company was not worried about iTunes Radio, claiming that the company "did not see the picture changing". Apple launched its service last month, with a report last week stating that the service would be coming to the UK, Canada, Australia, New Zealand, and more countries by early 2014.

Apple's expansion could put its availability ahead of Pandora's in some markets, as Pandora currently operates only in the U.S., Australia, and New Zealand. Pandora, which removed its 40-hour free listening limit ahead of the iTunes Radio launch last month, has remained among the top-grossing apps [Direct Link] in the App Store, with its Pandora One premium service being among the top in-app purchases overall.

Top Rated Comments

(View all)
Avatar
89 months ago
iTunes didn't kil the CD. iTunes rescued the paid-music industry that was destroyed by the end of people wanting CDs. CDs were dead anyway. All iTunes did was rescue the music companies by giving them a way to survive. Without iTunes there'd be no Pandora.
Score: 19 Votes (Like | Disagree)
Avatar
89 months ago
Detrimental because it killed the CD business? Yes and cars killed the horse and buggy, computers killed the typewriter. Blah blah blah.
Score: 16 Votes (Like | Disagree)
Avatar
89 months ago
Detrimental to his business model

Advantageous to me - helps me discover new music and buy straight from within the app - or add to wish list

So for me useful :)
Score: 13 Votes (Like | Disagree)
Avatar
89 months ago
iTunes Radio is more enjoyable to use on iOS than Pandora. Period.

Also, the music is more diverse. My music was rejected from Pandora a couple of years back when I tried submitting it. They seem to have a thing against independent musicians. They said my music 'doesn't fit into their collection'. Alright.

Apple doesn't discriminate. With iTunes Radio, you're getting everybody. I think that leaving out indie artists is a pretty bad mistake and sucks for listeners looking for interesting new music.

Not to mention, Pandora's iOS app throws horribly designed UIWebView ads in your face every time you enter the app to change something on the now playing screen. Ads are fine and all, but at least do it in a way that is classy.

Even more so, Apple pays its artist more money. This is kind of big.

All in all, I prefer iTunes and find that it actually provides a better experience.
Score: 9 Votes (Like | Disagree)
Avatar
89 months ago

I tried Pandora and Spotify before... didn't really care for it. The songs they picked for my station were hit and miss. iTunes radio on the other hand has been pretty consistent in giving me songs I like. Within the last month alone I have already bought a bunch of songs I've never heard of before, which is more than the nothing I have spent on the other services.

A real credible threat indeed.


I thought I was alone in thinking that iTunes was much better. I mean I constantly skip songs on all the other radio services that I tried, but iTune radio always produces a good playlist that I can listen to for hours. That, plus the fact that I can buy the song directly.
Score: 7 Votes (Like | Disagree)
Avatar
89 months ago
I'm sorry, I don't speak corporate jibberish, a little help here? :)
Score: 7 Votes (Like | Disagree)

Top Stories

Apple Takes Legal Action Against Small Company With Pear Logo

Saturday August 8, 2020 11:09 am PDT by
Apple is taking legal action against the developers of the app "Prepear" due to its logo, according to iPhone in Canada. Prepear is an app that helps users discover recipes, plan meals, make lists, and arrange grocery deliveries. The app is a spinoff of "Super Healthy Kids," and the founders claim that they are facing litigation from Apple. Apple reportedly takes issue with Prepear's logo, ...

Kuo: Global iPhone Shipments Could Decline Up to 30% If Apple Forced to Remove WeChat From App Store [Updated x2]

Sunday August 9, 2020 10:17 pm PDT by
In a worst-case scenario, Apple's annual global iPhone shipments could decline by 25–30% if it is forced to remove WeChat from its App Stores around the world, according to a new research note from analyst Ming-Chi Kuo viewed by MacRumors. The removal could occur due to a recent executive order aiming to ban U.S. transactions with WeChat and its parent company Tencent. Kuo lays out...

Google Maps Debuts New Apple Watch App and CarPlay Features

Monday August 10, 2020 9:16 am PDT by
Google today announced the launch of several features for Google Maps on Apple products, including new CarPlay functionality and a new Google Maps app that works on Apple Watch. The new Google Maps app for Apple Watch works similarly to the iOS app, allowing Apple Watch owners to get directions for a car, bike, public transit, or on foot. The app supports estimated arrival times and...

2020 iMac Teardown Reveals Internal Changes and Similarities

Saturday August 8, 2020 12:44 pm PDT by
A teardown video, shared by OWC, reveals the internal changes in the new 2020 27-inch iMac. The 2020 27-inch iMac was announced earlier this week with 10th-generation Intel Core processors, AMD Radeon Pro 5000 series graphics, up to 128GB of RAM, up to 8TB of storage, a 1080p front-facing FaceTime camera, a True Tone display with a nano-texture glass option, higher fidelity speakers, and...

Apple Seeds iOS 14 and iPadOS 14 Public Beta 4 to Testers

Thursday August 6, 2020 10:05 am PDT by
Apple today seeded new public betas of upcoming iOS 14 and iPadOS 14 updates to its public beta testing group. Today's software releases, which Apple labels as fourth betas to keep them in line with developer betas, are actually the third betas that Apple has provided and they come two weeks after the prior beta releases. Public beta testers who have signed up for Apple's beta testing...

Apple Believes This German Cycling Path Logo Infringes on Its Own Logo

Wednesday May 1, 2019 9:51 am PDT by
Apple recently objected to the logo of a new German cycling path in an appeal filed with the German Patent and Trademark Office, according to German outlets General-Anzeiger Bonn and Westdeutscher Rundfunk. Apple reportedly takes issue with the logo's green leaf and supposed "bitten" right side, attributes the company believes are too similar to its own logo. The logo, registered with the ...

Supposed iPhone 12 Display Unit Leaks

Thursday August 6, 2020 8:13 am PDT by
An image supposedly of an iPhone 12 display unit has been shared online by leaker "Twitter user Mr. White". Compared to images of an iPhone 11 Pro display piece, this new unit has a reoriented display connector, reaching up from the bottom of the display, rather than from the left-hand side on iPhone 11 Pro. This may be due to the logic board moving to the other side of the device. A...

Foxconn Reportedly Begins Seasonal Hiring Spree for iPhone 12 Production

Monday August 10, 2020 7:03 am PDT by
Apple's largest manufacturing partner Foxconn has begun its seasonal hiring spree to assist with iPhone 12 production, offering employees who recruit qualified applicants up to a 9,000 yuan bonus, according to Chinese media reports. As usual, Foxconn needs as many hands on deck as possible at its factory in Zhengzhou, China to assist with mass production of the upcoming iPhones. Apple is...

8 Third-Party Home Screen Widgets That You Can Try Out Now on iOS 14

Wednesday August 5, 2020 12:56 pm PDT by
One of the biggest new features of iOS 14 is Home Screen widgets, which provide information from apps at a glance. The widgets can be pinned to the Home Screen in various spots and sizes, allowing for many different layouts. When the iOS 14 beta was first released in June, widgets were limited to Apple's own apps like Calendar and Weather, but several third-party developers have begun to test ...

New 27-Inch iMac's Storage Affixed to Logic Board, 4TB and 8TB Configurations Have Expansion Connector

Friday August 7, 2020 7:46 am PDT by
Following a report from German blog iFun.de that claimed the new 27-inch iMac's flash storage is soldered to the logic board, MacRumors has obtained additional information in an internal document for Apple technicians. In the document, Apple says that the flash storage is indeed affixed to the logic board and cannot be removed. However, for the 4TB and 8TB configurations, Apple says that a...