It’s barely two weeks since Apple actually closed (paywall) on its $3 billion purchase of Beats Electronics. Nobody really knows how the world’s biggest—and arguably most secretive—company plans to fully integrate the headphones and streaming-music service operator into its broader empire. And it turns out that extends to people in the streaming music industry.
Here is Pandora CFO Mike Herring at an investment conference hosted by Oppenheimer Securities this week (from a recording and transcript provided by FactSet).
Oppenheimer analyst Jason Helfstein
Beats, any update on what were kind of seeing out of them? Obviously we got a lot of fanfare post the Apple announcement.
Mike Herring (Pandora CFO)
Beats has been all about fanfare from the beginning.
Helfstein
So nothing now?
Herring
Yeah. I mean I don’t have anything to add, they’ve been surprisingly quiet, I mean, we’ll see.
While it might not know what Apple is planning, Pandora, the biggest online streaming company with around 76 million active users, is nonetheless confident that Apple/Beats won’t be a threat to its business.
I don’t have much comment on Beats. Frankly, it’s not a competitive service in any form today. iTunes Radio is much more of it, competitive service and really had no impact on us long-term. If we do our job well, they’ll continue to provide the best service possible, I think Apple has been a really important partner to us in a lot of ways, we don’t see that changing any time soon. So only time will tell but we feel really confident in our position.
That might seem like over-confidence, given Apple has the world’s biggest cash chest to play with, and the extremely well-connected Beats founder Jimmy Iovine now on its books. Iovine’s industry relationships could be a huge asset for Apple in striking content deals with record labels, something Pandora (despite a landmark deal with indie labels last week) has really struggled with.
But in fairness, Pandora has seen off the threat of iTunes Radio (which was touted as a Pandora-killer). It’s also not the first time the company has expressed calm about Apple and Beats. And, as I’ve have pointed out before, Pandora’s service really is different. It’s a replacement for broadcast radio and targeted at the overwhelming majority of consumers who don’t want to pay for music; Beats, like Spotify, is more of a replacement for physical music ownership and digital downloads (like iTunes).
People aren’t really expecting anything major from Apple on the Beats front for a while, but there is a big event coming up next month, when the iPhone 6 will be unveiled—and with the Cupertino giant you can never really be sure about anything.