Apple iRadio Launch Rumor Spooks Pandora Shareholders
We've heard rumors of Apple launching a streaming music service before, but never ones this specific or this far along in negotiations. Pandora's shareholders certainly believe there's truth to the rumor and have been dumping stock in anticipation of what could be a game changing launch. Shares of Pandora are currently trading for around $15.25, down more than 10 percent over its closing price before the weekend.
The Wall Street Journal claims the streaming music deal has been in the works for at least a year. The reason it's taking so long is because the major music labels have been negotiating three separate issues: royalty rates, a guaranteed minimum payment in case Apple decides not to sell ads at the get-go, and at which point Apple will split ad revenue with the labels.
Services like Pandora, Slacker, and Spotify could be in trouble if Apple enters the fray. Furthermore, Google recently announced a streaming service of its own that runs $9.99/month, or $7.99/month if you start your free trial before the end of June and stay on as a member.