Apple said to be close to streaming music deal, report says, as Pandora stock slides

BRENDAN MCDERMID/REUTERS - An Apple staff member demonstrates a new Verizon iPhone 4 at Verizon's iPhone 4 launch event in New York, in this file picture taken January 11, 2011.

Pandora shares took a dive in Friday trading amid speculation that Apple may be close to a deal with major music labels to launch a streaming service.

The prediction that Apple is planning to launch its own online radio service has been a persistent one, cropping up several times over the past few years. The rumor mill kicked into high gear again Thursday evening after CNET’s Paul Sloan reported that Apple is in discussions with Warner Music and Universal Music Group to get the rights to feature their catalogs on a new service.

More tech stories

Parking doesn’t have to be a hassle

Parking doesn’t have to be a hassle

Meet the man who wants to make parking in a garage as fun as riding in an Uber.

Big data: A double-edged sword

Big data: A double-edged sword

New information will improve our health and prevent crimes, but uncover skeletons and hurt privacy.

White House updating online privacy policy

White House updating online privacy policy

A new Obama administration privacy policy explains how the government will gather the user data of online visitors to WhiteHouse.gov, mobile apps and social media sites, and it clarifies that online comments, whether tirades or tributes, are in the open domain.

Apple spokesman Tom Neumayr declined to comment on speculation.

Pandora shares were down significantly in Friday trading — something that has happened in the past when rumors about Apple’s music service have surfaced. As of 3 p.m., the company’s shares had fallen over 7 percent to $12.82 from the day’s open of $13.52. Apple shares were down two percent to $420.75.

Pandora’s shares jumped earlier this month after the company reported earnings that exceeded analyst expectations, projected it could turn its first profit this year and announced that chief executive Joe Kennedy would step down.

But competition from Apple would pose a major obstacle for the company, particularly if CNET’s report that the tech giant will be able to offer music labels a stronger revenue stream proves true.

According to Sloan’s report, Apple and music labels are working out a way for users to buy tracks they hear on the service, currently nicknamed iRadio, from the iTunes store straight from their mobile device. While Pandora also offers the option to buy a track from the iTunes store or Amazon.com, Apple’s system would give consumers a more convenient way to purchase any track they hear on the service but would not let users pick which songs they want to hear in the way that streaming service Spotify does.

The report said that Apple could launch the service as soon as this summer.

Streaming music has grown quickly in the past few years, and digital music services have been cited as a main reason that the music industry saw its first profit in nearly a decade in 2012.

In addition to services such as Pandora, Spotify, Rdio and others, Google is also said to be working on a streaming music site through its YouTube video service, CNET reported earlier this month.

 
Read what others are saying