Pandora, Apple, and Sirius XM Can All Have Streaming Fun

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Pandora (NYSE: P  ) was heating up this summer. The music-discovery service posted strong August metrics this morning, serving up 1.16 billion hours of digital music and comedy, a 70% increase over August of last year. The number of active listeners climbed 48% to 56.2 million in that time.

That's a welcome sight. Seeing usage growing faster than the size of the audience means the average listener is streaming Pandora a lot more than before.

The improvement may not seem to be so significant, though, if you stack the company up to where it was a month earlier -- 1.12 million hours of online content to 54.9 million listeners. Still, at least Pandora keeps moving in the right direction.

Then again, investors aren't really worried about where the company's at right now. They're worried about where it will be in a few months.

Satellite giant Sirius XM Radio (Nasdaq: SIRI  ) is set to introduce a Pandora-like service next quarter. Pandora has twice as many active accounts as Sirius XM, but the premium-radio service is the one succeeding in landing paying customers. Sirius XM charges less for its streaming product -- to folks already paying for receiver-based subscriptions -- than Pandora charges for commercial-free access on its platform. That difference may matter when Sirius XM hops on the Pandora bandwagon with customized Internet radio.

Then we get to reports that Apple (Nasdaq: AAPL  ) is working on its own music-discovery platform. Apple has been surprisingly absent from the streaming-music movement, and it's only a matter of time before it lines up the necessary licensing rights from the record labels that already rely on the tech giant as the country's top music retailer.

Is Pandora really going to buckle under? It's already butting heads against Spotify, iHeartRadio, and countless streaming alternatives. Apple and Sirius XM will definitely take a slice of the music-discovery market, but we're also talking about a pie that's growing even faster.

Spotify made its stateside debut last summer, and iHeartRadio introduced its Pandora-like streams a few months later. Go back a few paragraphs to see how well Pandora's been growing despite the presence of these two heavyweights over the past year. As smartphone usage grows and new gadget-savvy cars replace old autos, Pandora is exactly where it needs to be to grow.

The party's just getting started. Everyone in attendance can still have a good time.

Streaming out loud
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The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.


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