Apple, owner of the iTunes Store, and Beats, which started a streaming-music service this year, are already competitors, Herring said today at the Bloomberg CFO Conference in New York. Their talks to combine in a reported $3.2 billion deal are a recognition of the “huge” opportunity in online music, Herring said.
“People are trying to figure it out,” Herring said. “We’ve done the best job to date and we think we can extend that lead.”
Apple is close to a deal to acquire Beats, people with knowledge of the situation said this month. Streaming services that have emerged have been unable to challenge Pandora, the biggest player in Web-based radio, Herring said.
“Almost every one has failed spectacularly,” he said.
Herring spoke on a panel with Todd Papaioannou, chief technology officer of Splunk Inc., which provides software to analyze and monitor data, and Mike Karim, CFO of General Electric Co.’s GE Software unit. They discussed the growing importance of data in making business decisions as well as the security risks.
Pandora is a data company focused on music, Herring said. Google Inc., Facebook Inc. and Twitter Inc. are all data companies and all of them are focused on how to better use the information they pull in from users to advance their businesses, he said.
Data can help companies save money and make money, Papaioannou said. Companies that haven’t been hacked yet will be, he said.
“Over the next decade, companies who leverage and monetize on the data are going to win,” Papaioannou said. “Those who don’t invest in how to use data will be left behind.”
Pandora, based in Oakland, California, rose 1.5 percent to $25.03 at the close in New York. The stock has fallen 5.9 percent this year.
The company sees a $50 billion market opportunity in ad-supported online radio, Dominic Paschel, vice president of corporate finance and investor relations, said today at a webcast investor conference hosted by B. Riley & Co. in Santa Monica, California.
“We believe the larger market opportunity is really the lean-back environment,” Paschel said, referring to areas like in-car entertainment where online radio is growing. “We think we’re focused on the right area.”
Pandora has a 9.3 percent share of U.S. radio and controls 78 percent of Internet radio, Paschel said, citing data from digital audio researcher Triton Digital.
Radio ad revenue was $17.6 billion in the U.S. last year, according to the Radio Advertising Bureau.
Other mergers are being contemplated as entertainment moves online. Twitter is considering buying SoundCloud Ltd., a Berlin-based startup that lets people share music, a person with knowledge of the talks said this week.
In video games, YouTube owner Google has held talks to purchase Twitch Interactive Inc., which allows gamers to watch each other play, according to a person with knowledge of the situation.