Apple Working on Custom-Radio Rival to Pandora

Apple, looking to solidify its dominance in online music, is in discussions to license music for a radio service similar to the one offered by Pandora Media, the Wall Street Journal reported.

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Pandora shares in early Friday trading dropped about 20 percent amid investor concerns that the big rival could affect the company's business.

Apple's custom-radio service would work on its various devices, including the iPhone, iPad and Mac computers. Like Pandora, it would create virtual "radio stations" that play music similar to songs and artists a user enjoys.

The service eyed by Apple could also possibly work on PCs running Microsoft's Windows operating system, but not on smartphones and tablets running Google's, according to the Journal. Google and Apple are battling over mobile market share and dominance.

It wasn't immediately clear how advanced Apple's talks with music labels are. But even once the tech giant completes deals, it could take months for the radio service to launch, the Journal said.

Apple is looking for licensing deals with music companies that would offer users more interactivity than allowed by so-called compulsory licenses used by Pandora, it said.

An Apple spokesman declined to comment on the possible custom-radio service.

Other online music services, including Spotify and Clear Channel's iHeartRadio, have also added Pandora-type custom-radio offers.

But the Journal highlighted that with its custom-radio plans, Apple would take on Pandora, one of the few companies with real consumer traction in online music. The paper said that a recent Nielsen survey showed that more adults said they listened to music using Pandora than Apple's iTunes.

Pandora had 54.9 million active users as of last count, compared with Spotify's 16 million and Apple's more than 400 million iTunes accounts.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai