Apple Music Sinks Rivals' Stocks
Some investors fear the soon-to-launch Apple product could slow the growth of rival services like Pandora and Rhapsody.
Shares of Pandora Media and RealNetworks each tumbled 4 percent Monday after Apple announced its Apple Music digital service will launch June 30 for $9.99 a month.
Some investors fear the soon-to-launch Apple product could slow the growth of rival services like Pandora and Rhapsody, a joint venture partially owned by RealNetworks. Others that could be affected include Spotify, iHeartRadio and Tidal.
Pandora, which offers a $4.99-per-month premium service but also features free accounts, is considered the leader in the industry with 200 million registered users. Its shares dropped 70 cents Monday to $17.69, giving the company a $3.8 billion market capitalization.
Rhapsody has a $4.99 and a $9.99 service and allows multiple users on a single account. The joint venture boasts 2.5 million paying subscribers. Shares of RealNetworks fell 25 cents to $6.82, giving the pioneering new-media company that first made a name for itself with its RealPlayer software a market cap of $246.2 million.
Apple, of course, is a major player in digital music already via its iTunes store and it acquired a service called Beats Music when it purchased Beats Electronics, best known for its headphone business, for $3 billion last year. Apple Music will integrate Beats One, a global Internet radio channel with DJs that allows users to skip tracks.
Shares of Apple rose 1 percent Monday to $127.80, giving the company a market cap of $736.3 billion.
According to PricewaterhouseCoopers, digital music streaming will be a $1.8 billion industry in the U.S. by 2018, at which time it will pass digital music downloads, which will be a $1.7 billion business.