Pandora CFO Sees iTunes Radio as 'Credible Threat', Calls iTunes 'Detrimental' to Music Industry

[Red Oak]

My guess is they are starting to see some worrisome data points from the iTunes Radio launch, and these measured comments reflects it

So, Pandora finds a way to pay the music labels and artists less money, yet they believe iTunes is the one that has been bad for the industry? Okay

 

[avanpelt]

iTunes is detrimental to Pandora's business but it's not detrimental to the music industry.

One could argue that iTunes saved the music industry by dragging them (while they were kicking and screaming) into the era of legal online downloading and streaming.

Ten or fifteen years ago, I wasn't buying CDs like the record companies were hoping I was. I was using services like Napster and Kazaa to download MP3s constantly. Fast forward to today and I don't download any music illegally -- and haven't for at least seven or eight years. What caused me to change my behavior? iTunes. And I suspect I'm far from the only person for whom this is true.

 

[iSRS]

He lost me at "that have agendas outside a really awesome music experience" He clearly has a firm grasp on Apple and how they do things.

Oh, and this gem "specifically iTunes, that disintermediated the entire CD business, which was detrimental." - yeah, as opposed to his business.

Oops! "Pandora CEO Joe Kennedy stated last month that the company was not worried about iTunes Radio, claiming that the company "did not see the picture changing"."

 

[SBlue1]

I think iTunes has by far the best algorithm to find music I like. Big big big thumbs up! Best new software feature Apple has come up in years!

I have not yet played one of the curated radio stations though. I just made my own. Just select a song and it's like Genius but with songs you don't own. Tweak it a little in the beginning with "more like this" or skip unwanted songs and it learned what I wanted. Skipping songs now less than one in 30 or 40 songs.

Can't wait to have it in Germany officially. Changing german and american accounts almost daily because yet another app needs the german account for an update is a pain.

 

[Akuratyde]

What a joke. Pandora and Spotify are detrimental to the music industry because they don't pay enough to the artists. Without artists making music you have no music industry.

 

[NewbieCanada]

They like to say that but that is like saying TV is dead because you can buy shows on iTunes or stream them on Netflix now. Just because it doesn't fit into their little ecosystem (which is perfectly fine, use whatever works for you), they assume it to be redundant technology that nobody uses.

It is true that physical formats are slowly on their way out, which is a massive shame in my opinion. Hopefully it'll take more than my lifetime to totally kill off CDs.

Once upon a time a Christmas episode of Corrie or Eastenders would get well over 20 million viewers. Last Christmas Eastenders was still on top - but with only 9.37 viewers and Corrie had 8.35 million.

Yes, the BBC and ITV still lead - but C4, FIVE, many digital channels their audience share has sharply declined. The same is even more true of American broadcast networks. TV isn't dead - but it's changing rapidly, with broadcast/terrestrial channels losing viewers at a fairly rapid clip.

So no, the CD isn't quite dead yet. I'm not sure how it would make anyone feel better if instead of using the shorthand of "dead" we instead said "in a rapid and irreversible death spiral."

 

[newyorkone]

"And you had the download platforms, specifically iTunes, that disintermediated the entire CD business, which was detrimental."

With comments like that, Pandora is DOOMED, because their CEO is clueless, without vision, and living in a delusional past. CD's were already DEAD when iTunes happened. If anything iTunes saved the music industry. Haven't used Pandora once since iTunes Radio and now I'm definitely not going to...

 

[Telp]

There's a difference.

CDs are still "in play" - how many horse and buggies do you see typically?

Your post reads like a quote from an Apple keynote. In fact I am sure I've heard it exactly like that...

Well as I live close to the Amish, more than you'd think.

Also, while CD's may technically still be 'in play', iTunes gave a means for the industry to expand and grow. Less people pirate than Pandora's CEO wants to believe, and while there are still a great amount of people that do, the majority of people would rather purchase their music legally, and what better way than with 3 clicks from your computer.

 

[bassfingers]

This dude is looney. iTunes saved the music industry. They would have died without offering consumers a legal digital option. The industry was so intent on keeping the status quo of selling physical CDs, that they refused to adapt to their own market. The current state of the music industry is its own stupid selfish fault.

Now, labels and publishes are asking car manufacturers to phase out CD players because the cost of printing CDs and the contracts with resellers no longer make financial sense compared to digital distribution.

It's shame too, because the lack of funds has a direct impact on the quality of high budget music. No one is taking chances on new interesting, creative artists. So, all the good new music is typically the underproduced, poorly mixed, hardly mastered, indie internet sensations.

 

[The Mrs.]

I tried Pandora and Spotify before... didn't really care for it. The songs they picked for my station were hit and miss. iTunes radio on the other hand has been pretty consistent in giving me songs I like. Within the last month alone I have already bought a bunch of songs I've never heard of before, which is more than the nothing I have spent on the other services.

A real credible threat indeed.

Agreed! I have made several purchases using iTunes Radio as it is super convenient and I don't have to put forth any effort like I do with Amazon MP3 store. Who has time to download to the computer, rip to iTunes, THEN synch their iDevice to save a few pennies (sometimes songs through iTunes are $1.29 versus $0.99 via Amazon)? To me, the convenience alone is worth it.

 

[roadbloc]

So no, the CD isn't quite dead yet. I'm not sure how it would make anyone feel better if instead of using the shorthand of "dead" we instead said "in a rapid and irreversible death spiral."

It isn't rapid. Any change to new technology is often slow and laborious, especially with people like me who purposely stick with older technologies to save money and gain the benefits the older tech has over newer tech. The transition from VHS to DVD is often considered the fastest transition from old to new tech, but in all it took over six years before DVDs were the most popular format.

There is no rapid about it. Hence why ten years after the iTunes Store launched, CDs still exist and sell fine. Not as much as they used to, but the market is still alive with a few more years in it yet.

 

[The Mrs.]

"And you had the download platforms, specifically iTunes, that disintermediated the entire CD business, which was detrimental."

With comments like that, Pandora is DOOMED, because their CEO is clueless, without vision, and living in a delusional past. CD's were already DEAD when iTunes happened. If anything iTunes saved the music industry. Haven't used Pandora once since iTunes Radio and now I'm definitely not going to...

No, artists putting out 2-3 hits AT BEST and expecting consumers to buy an entire CD is what did it. I'm not spending 15 bucks for a couple of radio hits when the rest of the album is garbage.

 

[kas23]

iTunes and the iPod were detrimental to the music biz. They introduced the mp3 to the masses, and as a result, introduced music pirating to the masses.

That's not to fault Apple. They did their job and made a ton of the money. This is just an example of the ills of technology, but the benefits greatly outweighed the bad. The record biz had their decades of raping the consumer and the balance finally shifted.

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CD's were already DEAD when iTunes happened.

Really? Exactly how were people obtaining and listening to music before iTunes? Radio? MP3s were just being downloaded by a select population of the internet, to mainly just listen to on their computers since MP3 players weren't really available.

 

[Ted13]

There's a difference.

CDs are still "in play" - how many horse and buggies do you see typically?

Your post reads like a quote from an Apple keynote. In fact I am sure I've heard it exactly like that...

Remarkably every single day while walking the dog or riding my bike in Central Park I see horses and buggies. Conversely, although I see my CD collection sitting on the shelf (long since imported into iTunes as Apple Lossless), weeks if not months go by without actually witnessing someone play a CD. So yeah, in my experience the CD is deader than the horse and buggy.

 

[MikhailT]

What a joke. Pandora and Spotify are detrimental to the music industry because they don't pay enough to the artists. Without artists making music you have no music industry.

None of the streaming services want to pay less to the artists. It's the music industry (mainly the records, artists aren't involved here) who are paying their artists less, not the streaming services.

If you see what the records are demanding in terms of how much of the profits they're entitled to, you wouldn't be so quick to blame those services. If you want an example, imagine artists getting .01 cent per play, records get .69 and the services get .30.

Also, if services drop to .10 cent, trust me, the records will demand .89 and it'll be the same .01 cent per play for artists.

 

[antipex]

I still buy CDs when it's a great album and high quality music – I can hear a significant difference in quality on my sound system. For everything else, and for individual tracks when the entire album isn't worth buying, I use iTunes. If Apple offered lossless tracks for download I'd ditch CDs entirely.

Also, iTunes Radio – while not perfect – has been far better than Pandora. Significantly fewer repeats and much better algorithms.

 

[RedCroissant]

I'm still upset that CDs killed the Cassette business, and that the disappearance of vinyl was due to the cassettes!!!!!!! At least vinyl is coming back and soon I hope to find a cassette deck for my car!!!

Plus, CDs are still great. I just wish they would start manufacturing mini-cds more seriously so that computer companies would start including or designing mini-cd drives for laptops. That would be awesome.

For anyone reading this......I love all of these. I still get CDs, if I find a good cassette, I'll buy that as well, and I just saw a brand new LP in a F.Y.E. last week. And yes, if anyone out there knows of a good combination CD/Cassette deck for a 2002 Ford Escape; I want it.

 

[NewbieCanada]

It isn't rapid. Any change to new technology is often slow and laborious, especially with people like me who purposely stick with older technologies to save money and gain the benefits the older tech has over newer tech. The transition from VHS to DVD is often considered the fastest transition from old to new tech, but in all it took over six years before DVDs were the most popular format.

There is no rapid about it. Hence why ten years after the iTunes Store launched, CDs still exist and sell fine. Not as much as they used to, but the market is still alive with a few more years in it yet.

If you think double digit declines in sales for four straight years isn't rapid, then, in radio terms, we're not on the same wavelength.

 

[adbe]

Let's hope iRadio gets a little better.

Pandora never gets my station wrong. iRadio puts disco in with Daft Punk. :|

I've given up on iRadio. Pandora was always about 50/50 for me, which caused me to cancel my account a few years back. iRadio gets about one song in ten right[1], half of those will be songs I already own[2]. iRadio also likes to play me the same song two or three times during my commute, and docks me a skip for jumping through the repeat.

Right now there isn't a 'personal radio' service I'm really happy with, but I might sign up with Pandora again since they're likely to be the best of a bad bunch for the foreseeable future.

[1] It seems to be just locking on to seven or eight albums then just shuffling them ad-nauseum. Most galling is hitting the 'never play again' option only for iRadio to respond with, "hey, here's three more songs by that artist you don't seem to care for."

[2] I have a match account, so if I really wanted a random shuffle of my entire music library, I don't need iRadio to get that.

 

[citi]

Agreed! I have made several purchases using iTunes Radio as it is super convenient and I don't have to put forth any effort like I do with Amazon MP3 store. Who has time to download to the computer, rip to iTunes, THEN synch their iDevice to save a few pennies (sometimes songs through iTunes are $1.29 versus $0.99 via Amazon)? To me, the convenience alone is worth it.

I'm not sure what your'e doing with amazon, but your'e doing it wrong. You buy, and then it automatically loads into itunes. It takes the same amount of time as if you bought using itunes on your computer, and it's not really pennies. It's 3$ per 10 songs. Do the math and it adds up fast. I buy from both.

 

[adbe]

For anyone reading this......I love all of these. I still get CDs, if I find a good cassette, I'll buy that as well, and I just saw a brand new LP in a F.Y.E. last week. And yes, if anyone out there knows of a good combination CD/Cassette deck for a 2002 Ford Escape; I want it.

If you're handy with a Dremmel and duct tape, I could probably get you kitted out with an 8-track.

 

[QCassidy352]

I find iTunes Radio far, far inferior to pandora. Far more songs that are nowhere close to what I want, and it continues to play songs that I've said "don't play again."

 

[citi]

I've given up on iRadio. Pandora was always about 50/50 for me, which caused me to cancel my account a few years back. iRadio gets about one song in ten right[1], half of those will be songs I already own[2]. iRadio also likes to play me the same song two or three times during my commute, and docks me a skip for jumping through the repeat.

Right now there isn't a 'personal radio' service I'm really happy with, but I might sign up with Pandora again since they're likely to be the best of a bad bunch for the foreseeable future.

[1] It seems to be just locking on to seven or eight albums then just shuffling them ad-nauseum. Most galling is hitting the 'never play again' option only for iRadio to respond with, "hey, here's three more songs by that artist you don't seem to care for."

[2] I have a match account, so if I really wanted a random shuffle of my entire music library, I don't need iRadio to get that.

It seems to me that people are basing opinions on what they think a radio genre is vs. reality. I chose James Blake radio and the vibe is %100 correct. For the person angry about disco in Daft Punk, the style they are playing on their new record is considered "New Disco" so it makes perfect sense.

1 tip. When you load your radio station, click on the "I" and drop down to Tune this Station. You will see a slider that you can change from Hits to Variety to Discovery. That may help people.

 

[adbe]

It seems to me that people are basing opinions on what they think a radio genre is vs. reality. I chose James Blake radio and the vibe is %100 correct. For the person angry about disco in Daft Punk, the style they are playing on their new record is considered "New Disco" so it makes perfect sense.

I'm not sure iRadio is that smart. I figured it was basically just Genius repackaged. "Of a hundred other people that own Foo by the Bars, more than a third of them also own Baz by the Boos; so here it is, you'll love it."

Anecdotally it seems that people whose tastes run more mainstream are having much better results with iRadio, whereas those who're into stuff that might be considered a little more left-field, iRadio is more hit and miss.

Eitherway, it's a non-issue. I want to hear songs that I like, or I'll probably like. Given a decent number of seed albums, iRadio has consistently picked songs that I really don't care for. That makes it useless for its intended purpose for me.

1 tip. When you load your radio station, click on the "I" and drop down to Tune this Station. You will see a slider that you can change from Hits to Variety to Discovery. That may help people.

So far I've not personally found that option improves matters at all. I agree others might benefit from experimenting with the tolerance control though.

 

[The Mrs.]

I'm not sure what your'e doing with amazon, but your'e doing it wrong. You buy, and then it automatically loads into itunes. It takes the same amount of time as if you bought using itunes on your computer, and it's not really pennies. It's 3$ per 10 songs. Do the math and it adds up fast. I buy from both.

That's just the thing, I RARELY use the computer. I use my iPad and phone exclusively. $3 is not going to make or break me unless I'm buying hundreds of songs, which I'm not.