Apple Wasn't Going to Be a Pandora Killer Anyway

Pandora (NYSE: P  ) shares have been on a rollercoaster since reports surfaced last month about Apple's (Nasdaq: AAPL  ) plans to introduce a streaming music service.

Well, that potentially game-changing platform may not be launching anytime soon.

Friday's New York Post reports that plans to roll out the service in time for last month's iPhone 5 launch were dashed after talks with the world's largest music publisher broke down.

Sources tell the New York Post that Sony/ATV -- the publishing arm owned by Sony (NYSE: SNE  ) and Michael Jackson's estate -- was asking for too much for a per-song rights fee.

It's probably just as well that talks at least temporarily broke down. This thing could've been another black eye of Apple Maps or AntennaGate proportions.

Kill the DJ, Apple
Buried deep in the article, sources tell the paper that instead of serving up songs based on music-discovery algorithms the way that Pandora does, "Apple's talks with the labels involves an element of promotion based on what music labels are pushing in any one month."

Boom! Goodbye, iStream -- or whatever Apple would have ultimately named this service.

Instead of hearing what you would probably like, Apple's service would be serving you what the major labels hope you'll like. Isn't this what made terrestrial radio such an integrity vacuum? Sure, this would be legal payola, but would listeners actually put up with this kind of model?

Don't tell me that folks will put up with anything that Apple shovels down their throats. The last time that Apple tried to raise the bar musically -- with the launch of Ping two years ago -- it was a dud. Apple fans may be blindly loyal, but they're not stupid.

Pandora didn't take off over the years because it's in cahoots with the major labels. The platform's reaching 56.2 million active monthly users -- serving up 1.16 billion hours of digital music and comedy -- because it works for the listener. There's no hidden agenda outside of hoping that users eventually upgrade to the commercial-free premium service.

If Apple's streaming service was existing only to push the major label content climbing the charts, the market would pass.

Sirius XM Radio (Nasdaq: SIRI  ) has promised its own personalized streaming option later this year. It better hope that it doesn't stray from Pandora's proven roadmap and follow Apple down a dark and winding road.

Let Apple be the one to blow the opportunity.

Streaming out loud
A new premium report on Apple details the opportunities and challenges in store for its shareholders. It's also been updated to include new iPhone 5 details! Click here to check it out now.

 

Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and is short Sony and has the following options: long JAN 2013 $22.00 calls on Sony. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 01, 2012, at 8:32 PM, DR1P wrote:

    "Pandora shares have been on a rollercoaster since reports surfaced last month... "

    Rick, have you looked at the Pandora chart? They've been on a rollercoaster since their IPO.

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