Online streaming giant Pandora has seen its shares dive by 17 per cent following talk of Apple‘s plans to potentially tap into the music-streaming market.
Reuters reports that Pandora shares closed at $10.47 on Friday after the Wall Street Journal reported Apple is in the “early stages” of talks with record labels to launch a similar service.
The news served as a fresh reminder of the rapidly developing competition around Pandora, with the likes of Sirius XM Radio, Clear Channel and Spotify joining the battle for listeners in the online streaming radio market.
Founded in 2000, Pandora has gained a massive following by streaming music based on similar artists or genres to users through its Music Genome Project.
The company licenses its music through SoundExchange, an organisation that collects and distributes digital royalties on behalf of artists and record labels. The US government sets the rates.
Capstone Investements analyst Rory Maher said that Apple would pose a huge challenge to Pandora if they went ahead with their plans.
“They are the biggest threat out there,” he said. “They have quite a bit of leverage through iTunes.”
Representatives from Apple and Pandora declined to comment on the reports.