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Statista: iTunes Radio already 3rd most popular music streamer

updated 11:50 pm EDT, Mon March 10, 2014

Close to capturing second, but still far behind reigning champ Pandora

Barely six months after it debuted, Apple's iTunes Radio has already eclipsed Spotify and Google Play All Access (and others) to become the third most popular music streaming service in the US, according to a new report from Statista. While long-time veteran Internet radio station Pandora continues to maintain a clear lead over all rivals, it has taken 14 years for the latter service to reach its current level of 70 million active listeners (as of last April) and it continues to struggle with profits.



According to the Statista chart based on data from Edison's annual radio report, Pandora has a 31 percent share of the music streaming market. This is based on active listeners (tuning in more than once a month) rather than paid listeners, which represents a far smaller group. It is difficult to directly compare Pandora to iTunes because of the different business models: iTunes Radio offers unlimited free listening on all devices, but users can avoid ads by signing up for iTunes Match. Apple has not released any recent reports on the number of active listeners since it announced it had acquired 11 million shortly after the service went live.

Pandora's percentage would suggest that iTunes Radio and iHeart Radio (third and second place, respectively) have around 20-21 million listeners. While users can hop between services freely (and at least one report has suggested that 92 percent of iTunes Radio listeners also find time for Pandora), that figure would suggest that iTunes Radio is growing at the fastest rate of the top three services, and is likely to overtake iHeartRadio in the next quarter or two -- particularly if iTunes Radio expands to more countries (it added Australia last month, and plans to add Canada, the UK and New Zealand in the foreseeable future).

This spells trouble for Spotify, which is already an international service and well-regarded for its $10 per month "millions of songs on demand" streaming option. Nevertheless, it was rated at six percent share, followed by Google Play All Access at three percent. Rhapsody, Slacker and TuneIn Radio all took only two percent share.

Pandora's years-in-the-making success is unlikely to change anytime soon, and indeed it recently reported modest growth in active listeners and the number of listener hours (though it has more recently focused on raising income from advertising and mobile ads rather than pursuing paid subscribers as a priority). However, its margins are very thin: the service has extraordinarily high licensing costs (which are rising) and was recently handed a defeat by the FCC on its plan to lower licensing costs by taking over a terrestrial radio station, thus qualifying for lower FM radio royalty rates.

While Pandora made $410 million in revenue in 2012, it cleared only $16 million in profit. In 2013, it earned $638 million in revenue but lost $40.7 million for the year, and has warned investors it will likely lose money for the next year or two. There is also evidence that listeners are growing tired of Pandora's limited pool of about 800,000 songs. Its closest rival, iHeartRadio, is a service owned by terrestrial radio company Clear Channel and has both lower royalty rates and some 800 commercial radio stations featured in the app. Apple, of course, can invest in iTunes Radio as it wishes, and has access to the largest pool of available music anywhere, with over 15 million songs available.



By Electronista Staff
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Comments

  1. bonaccij

    Fresh-Faced Recruit

    Joined: 06-19-03

    So... where's the other 37%...

  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    I like iTunes Radio but I love using the Mac Spotify application and the way it can pull up almost any album or artist I want to hear. I got hooked almost instantly using all the various applications that have been made for it to generate music lists. I'm not all that familiar with using Pandora because I've only used it a few times and didn't leave much of an impression due to it's somewhat limited catalog which didn't have many extended versions or remixes. I honestly wish Apple could purchase Spotify's interface and APIs and have that $15 million song catalog at my fingertips. Spotify gives me exactly what I'm looking for in a streaming service because it seems to allow so much fine tuning for songs, artists and genres.

    I don't want to see Apple crush all the other streaming companies but I think Apple could certainly do that if they wanted to. I don't think Apple should need to try to ruin all those other streaming companies' businesses. If Apple only reaches about 20% market share, that should be more than sufficient. Apple should just keep their subscription fees higher than most and provide a really premium service. I know Wall Street won't be happy because they're only happy when one company starts putting all other companies out of business.

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    Interesting comment on Spotify. My experience is limited but I definitely see the appeal of having a giant jukebox with you all the time. I'm enjoying iTunes Radio a lot now, their tune-picking seems to work better than before (I always keep my stations halfway between "hits" and "discovery"). I recently created a new "chillout" station, pointed it to three specific artists and a few specific albums and so far I'm just amazed at how well it has pointed me to similar artists, some I was familiar with and others I didn't know about.

    As for Apple buying Spotify -- could happen, I suppose! But I don't think Apple has any interest in "crushing" the other streaming companies (and couldn't do it even if it wanted to). iTunes Radio doesn't have a "subscription" cost -- it's free with ads, and free with an iTunes Match purchase (no ads). I had iTunes Match already for its own reasons, so for me that was a win-win.

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