(Updates with closing share prices in fifth paragraph.)
By Andy Fixmer and Adam Satariano
Oct. 8 (Bloomberg) -- Apple Inc. plans to expand iTunes Radio to English-speaking countries outside the U.S. by early 2014, beating industry leader Pandora Media Inc. to the U.K. and Canada, people with knowledge of the situation said.
ITunes Radio is also set to start early next year in Australia and New Zealand, where Pandora already operates, said the people, who asked not to be identified because the plans aren’t public. Nordic countries are also being targeted in the same time frame, the people said.
Apple is moving faster than Pandora because it forged agreements for international rights with Vivendi SA’s Universal Music Group and other record companies, said one of the people. Pandora, which doesn’t have such deals, relies on rights granted by government entities, limiting service to the U.S., Australia and New Zealand.
Trudy Muller, a spokeswoman for Apple, declined to comment yesterday.
Apple, based in Cupertino, California, fell 1.4 percent to $480.94 at the close in New York. The shares have declined 9.6 percent this year. Oakland, California-based Pandora declined 7.8 percent to $24.26, the biggest drop in two weeks, after almost tripling in 2013.
Pandora, Apple and rival offerings from Spotify Ltd. and Rdio Inc. let customers listen to a mix of songs based on their musical tastes.
Apple last month instantly became the biggest challenger to Pandora when it released iTunes Radio with the new iOS 7 mobile software that comes with every new iPhone and iPad. More than 11 million listeners sampled the service in the five days after it became available.
With the expansion, Apple is mimicking its rollout of the iTunes music store more than a decade ago, starting out in the U.S. and then moving to other countries, said one person.
Eddy Cue, the Apple senior vice president in charge of iTunes, told the Associated Press last week that the company wants to eventually bring iTunes Radio to more than 100 countries, including the U.K., without elaborating on timing. The Apple-focused news website 9to5Mac.com reported that the iPhone maker is seeking to hire programmers for the product in Canada.
Like Pandora, Apple is wooing advertisers for its service. ITunes Radio has reached deals for campaigns with McDonald’s Corp., Nissan Motor Co., PepsiCo Inc. and Procter & Gamble Co.
Pandora has no imminent plans to expand to a new country, founder Tim Westergren said at a Sept. 24 investor conference.
“Our hope is just that over time, as the benefits of our service become more and more obvious and apparent, that artists in particular will agitate and help propel this adoption in other countries,” Westergren said.