People like to own their music, but they also like to stream it. Streaming services like Pandora, Google Music, and Spotify have grown in popularity over the years. It's a very engaging and efficient way to discover new music. Apple recently entered this space with the launch of its iTunes Radio service, which so far is only available in the United States (but will surely roll out world wide).
Since Apple's entrance into this space, Pandora Media Inc. has been suffering.
Pandora Media Inc. (P), the biggest Web radio service, fell 10 percent after Apple Inc. (AAPL)said it attracted more than 11 million unique listeners to its new iTunes Radio service. Pandora, with 72 million active listeners, slid to $24.26 at the close in New York. Shares of the Oakland, California-based company have more than doubled this year.
Apple has proven to be a very disruptive company upon entering new markets, as illustrated above. More than 200 million customers have downloaded iOS 7 since September 18, and approximately 9 million new iPhones have been sold (most of them over the weekend). That means a lot of automatic iTunes Radio customers.
It is for this reason that it will be difficult for the other companies to compete with Apple. None have an equivalent media ecosystem or partnerships. Apple already has an enormous customer base, and it's one of the largest internet media retailers in the world. Also, Apple has a distinct advantage since there is a purchase button beside every song - a feature that no doubt was request by the music companies.