Pandora Media Inc (NYSE:P) Hits Record Lows As Apple Inc.(NASDAQ:AAPL) Close to Initiate Online Radio Service
Pandora Media Inc (NYSE:P) shares saw a sudden slump in the final hour on reports from Bloomberg that Apple Inc.(NASDAQ:AAPL) has strengthen its negotiations with major music labels to initiate an advertising-supported Internet radio service in first quarter of the next year.
The report further stated that both negotiations has been going regarding the suitable business model such as what would be agreeable share ad revenue and the deal is projected to finalize by mid next month.
As sales of music download slowing, Apple and record companies has been working on innovative means to attract customers.
To challenge online radio leader Pandora Media Inc. (P), Apple is seeking licensing pacts with labels that allow more flexibility about what listeners hear. Pandora relies on a compulsory license that limits how often users can skip tracks and how many times an hour an artist can be played. Apple is also seeking earlier access to new releases.
Recently, top management from Vivendi SA (VIV)’s Universal Music Group, Warner Music Group Corp., and Sony Corp. (6758)’s music division visited Apple’s headquarters in Cupertino, California to know further about its radio plans.
Shares of Pandora tanked 14.21% to $7.97, after slumping to new low of $7.32 just a while ago.