Pandora Not Falling Victim to iTunes Radio (AAPL, P)

If you believed that the introduction of iTunes Radio would mean the end of Pandora P you were in the majority.

Like Apple AAPL did to the music business, many expected iTunes Radio to send smaller competitors like Pandora to the technology startup graveyard but early numbers presented by Pandora’s chief financial officer Michael Herring paint a different picture.

Presenting at a Morgan Stanley conference in San Francisco Monday, Herring said that listening hours were up over eight percent in October despite losing about 1.8 million active listeners. That many listeners sounds like a large number but in the context of the company’s 70.9 million active listeners in October, a fluctuation of that size falls within the company forecasts.

Listening hours grew nine percent in October and its market share reached 8.06 percent—up from 7.77 percent in September.

Speaking at the iPad unveil on October 22, Apple CEO Tim Cook said that iTunes Radio had gained 20 million users who played a combined 1 billion songs.

These numbers alone don’t tell the whole story. A survey taken in October revealed that 92 percent of iTunes Radio users said they hadn’t ditched Pandora. Many use the two services concurrently while others reported returning to Pandora after trying iTunes Radio. Others stuck with Pandora after it lifted the 40 hour per month listening cap.

Related: Apple Rumor Mill Strikes Back, Promises Large iPad in 2014

Pandora is looking to expand its international operations beyond the United States, Australia, and New Zealand where it currently operates. The company plans to use some of the $400 million raised in a September stock offering to move into other countries. Herring said that international record labels may require upfront payments requiring a larger upfront investment.

The stock rose more than eight percent on Tuesday adding to what has been a nearly 200 percent gain in 2013 along. Since initially dipping after its IPO, the stock up about 108 percent.

But the threat is far from over. Apple watchers still consider iTunes Radio a work in progress. The platform is still in its infancy and just as Apple essentially closed down record stores and essentially ended the revenue stream from paid operating systems with its recent free upgrade for OSX Mavericks, Pandora is far from out of the woods.

However, the early numbers are encouraging for the company.

Disclosure: At the time of this writing, Tim Parker was long Apple.