Apple pushes the Integration of Web Radio

Rumor to gain attention 

As iPhone 5 finally showed up in the market this Friday Sept 14, Apple has kept its glowing power in the communication business. Prior to that, on September 7,  The Wall Street Journal  posted an article called “Apple Seeks to create Pandora Rival.” What Apple Inc. intended to do was to take on Pandora’s music streaming service and create its own music service station. With this announcement, Apple Inc. is taking advantage of its existing iTunes customers while hurting businesses such as Pandora and Spotify, changing the marketing sales model as well as the communication model.

Is Apple going to monopolize online music?

We will see a monopoly of online music radio service, or in other words, an integration of custom music radio stations. According to Youtube video by Ethan Smith, a Wall Street Journal news editor, there are 400M iTunes customers, 50M Pandora customers and 16M active users on Spotify, so Apple could just pull their existing iTunes users into the new custom-radio station without losing users. Instead of incorporating advertisements into different music services, now marketers would focus primarily on the coming music service, decreasing the total cost of advertising. 

When the announcement of Apple’s seeking Pandora rival came out, it hurt the business of other web radio companies especially Pandora, seen by Pandora’s decreased stock price since Sept 7. As Pandora mostly relies on revenues from smartphone advertisements, says Qineqt, it becomes deeply vulnerable when rivals like Apple comes into the stage to try to get those advertisers. 

Different Sales Model, Different Marketing Communication Model

The sales model in this market is changing from buying (iTunes) to renting (Pandora), according to editor Smith. Under this circumstance, the communication model is changing as well since customers are able to choose their preferences of taste given a particular period of time. In this way, Apple is trying to disrupt the digital ecosystem, by adding its version of online music radio , which is far away from its traditional role, according to CNBC’s Jon Fortt published on The Time Business.

Therefore, we are seeing a merging of web radio services in the coming future with Apple’s entry. Since once Apple offers streamed music service to individual users, its competition with Pandora will be absolute. However, what remains uncertain is whether Apple is going to have a free version with ads like Pandora does.

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