Pandora Media Inc. expects to see a “modest” impact from Apple Inc. new iTunes Radio, according to Tim Westergren, who founded the leading Web music service, according to Bloomberg.
Half of Pandora users listen on devices other than those from Apple, which makes the iPhone and iPad, Westergren told investors today at a conference sponsored by Goldman Sachs Group Inc. in
“We believe iTunes Radio will have a modest impact,” Westergren said, without providing specifics.
The company has been tested by larger competitors, Westergren said, citing iHeartRadio from broadcaster Clear Channel Communications Inc. (CCMO)
“They launched with a huge marketing budget and no commercials, and Pandora’s market share only continued to grow,” Westergren said.
Westergren also said Pandora stands to benefit from recent Web radio agreements, including Apple’s iTunes Radio deal, with the record industry that have secured slightly lower content rates than what it pays.
Pandora paid $164.7 million for music and other content during the six months ended July 31, which accounted for 58 percent of revenue. A year earlier, music costs totaled 64 percent of sales.