Shares of Pandora Plunge on Apple Streaming Service Rumor

Shares of Pandora Media P fell as much as 11.728 percent following a Billboard report that Apple AAPL is in talks regarding the possibility of a streaming service that would rival Spotify and Beats Music. On Friday, Billboard.com/biz noted that their sources suggest that the discussions are "part of a multi-pronged strategy to deal with the double-digit decline in U.S. download sales at Apple's iTunes Music Store, the largest music retailer." iTunes executive Robert Kondrk has suggested an exclusive album-release windows to enable customers to buy the digital album prior to the CD release. In addition, there have been talks regarding an on-demand subscription for the iTunes App for Android and spinning out iTunes Radio as a standalone app. According to Nielsen SoundScan, U.S. digital album sales are down 13 percent for the week ending March 9 and digital tracks are down 11 percent from last year. Although download sales have taken a hit, the Recording Industry Association of America (RIAA) reported that streaming services have generated $1.4 billion in subscriptions in the U.S. over the past year, up 39 percent from 2012. Billboard noted that "These figures provide fresh ammunition to those in the music industry who believe streaming services' all-you-can-listen model has drawn consumers away from download sales, where Apple dominates." The piece added that the iTunes offers official Google apps, but the Google Play Store only offers iTunes apps from third-party developers. Pandora has remained strong with the presence of iTunes Radio. Amidst the acknowledgment by Apple executives that iTunes Radio still needs some work, the rumor remains strong and threatening to Pandora shareholders. Shares of Apple closed at $532.87 on Friday and are currently up 3.23 percent at $536.10.