iTunes Radio Will Invigorate Internet Radio

Image representing iTunes as depicted in Crunc...

I’ve been away on vacation for the past week and a half or so – a vacation where I barely got online and didn’t check my email at all. After the first few days, it was surprisingly easy to do, and very relaxing. It turns out, last week was a big news week for Internet radio, with Apple giving the first preview of it’s nicknamed iradio product, and Pandora purchasing an FM station in Rapid City, South Dakota. I spent my first day back reading a lot and trying to get some perspective on both announcements.

iTunes Radio, it appears, will simply be Apple’s entry into the space, long awaited. After reading about it and talking to a few developers who have seen the interface, I guess it’s an Apple-esque, graphically interesting web radio  interface that does the same things that Pandora does. Not a lot of innovation, but a well done product – possibly less than I would have expected from Apple, since I’m aware they have been actively working on this entry into the markeplace for at least a year and a half, when they contacted me.

Don’t get me wrong, I think there will be innovation with this product, and I’m hopeful that it will expand the marketplace for everyone. According to one thing that I read, Apple is planning to sell ads on its streaming radio platform using iAd, its mobile ad business. Consider that Apple knows about its users, which provides for effective targeting, and has a credit card on file for each one of them, which most of them are accustomed to using already to purchase songs and apps. That’s a system that could translate to expansive online revenues for lots of advertisers.

I don’t think Apple will mean a lot of trouble for Pandora, although certainly they will begin to share audience. Pandora’s got a large user base and a lot of happy customers. They may lose some share, but the number of people using Internet radio will continue to grow, and they’ll still gain listeners. Meanwhile, they’ll benefit from another major player in the marketplace who will help build advertiser investment. Look at it this way: it would appear that Apple’s game is to solve the conundrum of how to monetize the mobile audience, in particular the streaming audio mobile audience. I’d say that’s good news for the industry.

 

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