iTunes Radio: Apple's Music Streaming Aims at Pandora, Spotify

Image: iTunes Radio: Apple's Music Streaming Aims at Pandora, Spotify

Thursday, 19 Sep 2013 10:12 AM

By Clyde Hughes

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Apple rolled out iTunes Radio on Wednesday, allowing users to stream music from the Internet on any device that uses iOS 7, including Mac, Windows, or Apple TV, as the company takes a crack at an industry made popular by Pandora and Spotify.

iTunes Radio has custom stations for listeners based on artists and genres. The service is free but has ads and limits to the number of times a listener can skip songs. An ad-free version is available to those with iTunes Match subscriptions, which costs $24.99 a year. 

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Apple released iTunes Radio as part of its iTunes 11.1 update. It also coincides with the release of iOS 7.

The service is only available to iTunes users, and it has not gone international yet.

Pandora investors did not appear fazed by their new competitor, as shares for the service leaped five percent Tuesday. The stock closed at $25.19, the highest since its IPO in June 2011, the New York Post reported. 

Pandora executives said that the company will use the boost to open local ad-sales offices to compete directly with radio stations. The company picked digital ad veteran Brian McAndrews as its new CEO.

Ad Age reported that companies like Pepsi and Nissan are already on board with iTunes Radio, shelling out $10 million for ad spots. 

"We've worked with all of them," Frank Cooper, PepsiCo's CMO for global consumer engagement said. "We looked at the devices Apple has and the number of subscribers that they have overall on iTunes. Just in terms of infrastructure, we think they have the chance to be the biggest."

ITunes already receives more traffic for its store than most streaming music services. ITunes received 26.6 million unique U.S. visitors in July 2013, compared to Spotify, which had 20.19 million unique visitors; Rdio, with four million; and Rhapsody, with 2.89 million, Ad Age reported.

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Related stories:

Kids' In-app Purchases on Free Game Rack Up $3,000 iTunes Bill

Xbox Music Launched by Microsoft: Free Service Rivals Spotify, Pandora

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