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The Real Pandora vs. iTunes Radio Fight Is About to Begin

Shares of Pandora (NYSE: P  ) moved higher today after the company offered encouraging metrics for the month of September.

Still, it's not as great as it looks -- and I'll get to that shortly -- but it certainly wasn't as bad as many feared after last month's arrival of Apple's (NASDAQ: AAPL  ) iTunes Radio.

Pandora had initially taken a hit after it was revealed that 11 million people upgrading to iOS 7 kicked the tires of Apple's new streaming service. It always seemed like an incomplete metric. How many of those 11 million early adopters were Pandora listeners? How many of them only fired up the app once? How many were actually being introduced to a streaming music discovery platform -- making them possible Pandora converts in the future?

So, how did Pandora hold up? Well, the year-over-year numbers that Pandora published this morning are solid. 

  • Listener hours rose 18% to 1.36 billion.
  • Pandora's share of the U.S. radio listening market has increased from 6.53% to 7.77% over the past year.
  • There were 72.7 million active listeners during the month, 25% ahead of last year's tally.

The metrics aren't as flattering when we go sequential, pitting September against August. In that sense, listener hours were almost unchanged from the 1.35 billion hours it logged a month earlier.

The real test, of course, will come once we get October's metrics in early November. After all, the active listener count includes anyone that was tuning in to Pandora and may have switched to iTunes Radio later in the month after it was introduced. If active listeners and hours go down in October relative to September -- something that did not happen last year, for those curious about any seasonal shifts -- then it will be time to worry about iTunes Radio.

For now, Pandora has passed the test, but it's still not a complete test. Still, the market digs it and pushed the stock higher. But we still don't know if iTunes Radio will be Apple's next hit or if its limitation to PCs and iOS devices will restrict its appeal.

Pandora is safe -- for now -- but there's no reason to pop champagne corks until we get the October metrics.

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  • Report this Comment On October 03, 2013, at 7:35 AM, jdmeck wrote:

    So far I prefer iTunes radio. More control and no commercials since I have iTunes match.

  • Report this Comment On October 27, 2013, at 4:35 PM, riwaterman wrote:

    you are absolutely correct that there is no reason for Pandora to pop the corks yet. In fact even when October's data is out, there should not be any cork popping. I would say we need to see November and most importably December's AND January's data.

    November and December will be big sales months for Apple and it won't be until January that Pandora will be fully affected by new purchasers or upgrades of apple products beginning to really try out Apple services such as iRadio. And once they discover the interaction between their music collection and iRadio that will have another impact.

    So we have to wait until early February to really get a good handle on the Apple impact.

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