While record companies have battled for years with free music providers to protect their business, that struggle is now extending to the up-and-comers. Internet radio services are now becoming lucrative for both artists and record companies and the industry is becoming more competitive than ever. Providers are scrambling to present new services that make listening both more convenient and more in tune with listeners' preferences.
Internet radio services such as Pandora (P), SiriusXM (SIRI), and Spotify have paid out vast royalties to artists and labels. Working through the non-profit facilitator SoundExchange, these parties have earned more than $1 billion for their content since 2000 and in the last fiscal quarter passed $100 million in revenue for the first time. With sales of CD’s diminishing more and more, this source of revenue has become more important than ever.
More players are entering the Internet radio industry and jumping at the chance to pay these royalties. On Wednesday, Spotify introduced an application for Apple (AAPL) products that contains a free Internet radio service. Up until now, users had to pay a monthly fee to get the London-based company’s music service on their mobile device.
This has long been the domain of Pandora Media. Analysts say that Spotify modeled their mobile service on the long time industry power in order to deliver their much more extensive song library to music fans. This development comes on the heels of another rival, Songza, climbing to the top of the app download charts on iTunes in recent weeks and Amazon (AMZN) launching their own service for iPhone's.
Business Section: Investment Ideas
Will the entrance of other competitors into the market spell doom for Pandora? While the company still has over fifty million users, it will have to continue developing its user experience if it is to remain the dominant force in the field of Internet radio. Listed below are the main powers in the industry that are publicly traded.
Written by Dan Connelly
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