OAKLAND, Calif., Fri Sep 7, 2012 – Shares of Pandora Media Inc. fell 14 percent in premarket trading on Friday following media reports that Apple Inc. was in talks to license music for a radio service like the one Pandora operates.
The Wall Street Journal, citing people familiar with the matter, reported that Apple wants to license music for a custom-radio service that would work on its hardware, such as the iPhone, iPads and Mac computers, in a bid to expand its dominance in online music. Apple’s iTunes is the largest music retailer.
Apple’s service would likely be a preinstalled “app” on Apple devices, the New York Times reported.
Pandora shares were down $1.77 in premarket trading from their closing price on Thursday of $10.80
Apple initiated talks for a license with record companies only recently, the Journal reported, and it could be months before a service is launched.
An Apple representative did not immediately respond to an email seeking comment.
Like Pandora, which competes against Clear Channel, Sirius XM Radio and Spotify, Apple’s service would intersperse music with ads, the Journal reported.
Last week, Pandora reported better-than expected quarterly results on higher advertising revenue as more people listened to music on their mobile devices, and the company raised its full-year revenue outlook.