Despite the looming threat of Apple's (NASDAQ: AAPL ) iTunes Radio, incumbent music streamer Pandora (NYSE: P ) isn't scared. CNET recently interviewed CFO Mike Herring, and while Herring acknowledges that Apple is a heavyweight to take seriously, he feels confident that Pandora is still the best at what it does.
Apple's potential expansion into international markets could also put more heat on Pandora. Apple can do this because it has struck direct licensing deals with record labels, which gives it more reach. However, Pandora points to other rivals such as Spotify that have similar deals -- and the red ink that they generate. The big difference is that Apple doesn't need iTunes Radio to be a profit center, while Pandora certainly does.
Herring also takes the opportunity to discuss rates throughout the music industry, highlighting the very notable differences in what companies pay based on what medium they use. In Pandora's case, Internet services pay the highest rates and also pay per play, while satellite services pay as a percentage of revenue and broadcast radio pays nothing. Apple also falls into the first category.
In this segment of Tech Teardown, Erin Kennedy discusses Pandora and Apple with Evan Niu, CFA.
All aboard the mobile train
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further."