This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Apple's iRadio Could Pose a Problem for Pandora

Like Spotify, Apple negotiated, and is negotiating, direct deals with the music industry. If published reports are true and the negotiations play out as expected, Apple will be paying more for music across the board than Pandora does.

But, remember, Pandora pays the compulsory rate. That's the route it chose to go. Relative to companies that do direct deals, Pandora actually has a sweet deal, just not in comparison to broadcast, satellite and cable.

There's no question, however, that with Apple willing to pay more than Pandora does (it is interesting to see Apple in a position where it must concede at least a little) it puts Pandora in a tough spot as it makes an argument for a more equitable payment structure. It still has a strong case when it compares itself to broadcast, satellite and cable, but a much weaker one next to much of the rest of Internet radio, which pays more than Pandora.


But again, don't lose sight of the distinction between the various methods of paying royalties, particularly compulsory vs. direct licensing. The industry might require a fundamental overhaul of this somewhat convoluted structure.

But, despite rhetoric over royalties, the music industry doesn't hate Pandora. It still cuts deals with the company. Consider, most recently, Pandora Premieres, which provides listeners early, full-length access to new albums one week before their official release.

However it plays out, expect Pandora to continue to grow as a key partner for the music industry, for major names as well as local/indie acts. That's an often overlooked key to success in the digital age of music . . . striking a balance between disruption of and partnership with the music industrial complex.

With or without Apple, Pandora has major plans to do more of both -- disrupt and partner -- as it enters the next phase of its maturation as a company. That could mean more revenue, a lead role in righting some of the music industry's wrongs, more records sold, more concert tickets purchased and an even stronger bond between music listener and the diverse mix of Internet radio platforms that Apple will most likely only make richer.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,051.33 -28.24 -0.17%
S&P 500 1,996.54 -0.20 -0.01%
NASDAQ 4,562.1080 +4.4130 0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs