Pandora Closes Up On Apple’s Big Day

When Apple announced its iTunes Radio Monday Pandora shares closed 2.5 percent higher and continued to move up after-hours.

ITunes Radio is more similar to Internet-radio service Pandora, than on-demand Spotify.  According to CNBC, here's how it works: users can pick an artist they like, and then iTunes will program a "station" with similar artists. Users can program their own stations or pick from ones Apple has already created. The radio stations are free, supported by ads, and for iTunes Match subscribers, they are ad-free.

As expected, it directs users to buy songs from iTunes—when a song is playing there's a button at the top encouraging users to buy a song, along with the price for the download. With Sony Music, Universal Music, and Warner Music on board, the service has access to iTunes library of over 26 million tracks.

Why didn't Pandora shares take a hit on news of this new competitor? According to Pandora CEO Joe Kennedy, it's not revolutionary enough.

Pandora sent CNBC this statement:

"Apple's new feature is an evolution of their iTunes offering to bring it on par with other streaming music services that have added radio into their feature sets. We have spent the last 13 years singularly focused on redefining radio and benefit from unrivaled intellectual property, deep experience in delivering personalized playlists, and ubiquitous product availability across every platform. We make it effortless for our more than 200 million registered users to connect with the music they love anytime, anywhere."

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