Pandora Media Inc. Chief Financial Officer Michael Herring said 80 percent of consumers would prefer to listen to advertising on Internet radio rather than pay for services like the one Apple Inc. announced Monday.
That difference will allow Pandora, the biggest Internet radio company, to withstand competition from Apple’s $10-a-month music service, Herring said. Because ad-supported Web radio, like Pandora, is more popular than subscriptions, musicians and record labels are able to reach a larger audience and sell more ancillary products, he said.
“The bigger opportunity, at least in America, at least through our research, is the ad-supported,” Herring said in an interview Tuesday on CNBC. Pandora finished the first quarter with 79.2 million active listeners.
Apple, which jump-started the music industry’s push to digital sales with the iPod in 2001, unveiled Apple Music, a streaming service with more than 30 million songs, playlists curated by music experts and ways for artists to share lyrics and backstage photos. Apple is offering a three-month free trial starting June 30.
Pandora, based in Oakland, California, fell 3.1 percent to $17.15 at the close in New York. The stock is down 3.8 percent this year. Apple was little changed at $127.42 on Tuesday.
“We understand consumers are curious, and we expect as new services are offered, people will reach out and try different services,” Herring said. Pandora’s product “has a lot of loyalty and has really been very successful with a lot of competition. We don’t expect that to change.”