Pandora Media Inc (P) Should Ride the ‘Tidal’ Wave to Reign in Apple Inc. (AAPL) Music

Investors in technology and related services stocks had a bright day on Monday. With Apple Inc. (NASDAQ:AAPL) launching the much awaited music streaming service, Apple Music, share prices of this iPhone maker soared. However, shares of a particular music streaming service, Pandora Media Inc (NYSE:P) fell by 3%. Why did Pandora share prices slip?

Apple Music to disrupt streaming industry

Apple Inc. has always been an innovator in any industry it begins its services. Be it book publishing to apps stores, the company has always been different and ensures it offers quality services at reasonable prices. However, its competitive spirit means, it disrupts the industry, allowing no room for growth of peers.

If this were to be true in the online music streaming industry, then Pandora Media Inc (NYSE:P) is likely to be the most affected. Investors in the music industry segment already understand this and are dithering investing in Pandora. Hence, the slip in share prices of Pandora Media was not unexpected.

Therefore, industry experts have begun to suggest that Pandora should consider fighting fire with Fire. The company the size of Apple Inc can best be countered by the likes of Tidal, the latest online music streaming service. This service offers music at a ‘lossless’ subscription and boasts of paying artists twice the royalties paid by competing services such as the (struggling) Spotify.

Tidal already has 30 million music tracks, which is nearly the same as that of Apple Music as well as Spotify. Pandora on the other hand has only million tracks. Besides, it is at loggerheads with most music labels such as Sony Universal as well as Warner Music. Besides, Tidal would also boost Pandora to step-up to latest music offerings, such as individual track streaming.

Pandora Media Inc (NYSE:P) is a profitable company with profits of $12.2 million in Q4 of 2014. In first quarter of 2015, it posted net loss of $48 million due to sales and marketing expenses. Therefore, by buying Tidal streaming service (owned by singer Jay Z) Pandora Media can battle Apple Inc. (NASDAQ:AAPL) goliath online music streaming services.