Pandora CFO Not Worried By Apple Music Announcement

Yesterday’s Apple Music announcement was seen as a long-overdue swipe at streaming music services like Pandora and Spotify that have dominated the market that Apple helped to create with the introduction of the iPod and iTunes, along with the iPhone and iPad mobile devices that people listen to the music on. Given Apple’s ability to instantly reach the large swath of iOS users, you wouldn’t fault these competitors from being frightened, but the Chief Financial Officer of Pandora doesn’t seem terribly worried.

“I don’t think it was anything too surprising,” Pandora CFO Mike Herring told CNBC this morning about Apple Music. “We’re still confident in Pandora’s position as the market leader, and expect to see our business continue to grow.”

A good part of why he’s not openly fazed by the prospect of Apple Music is that so much of Pandora’s audience has not yet shown a desire to pay a premium for streaming.

Pandora currently has around 80 million users, but only a fraction of them are paying for access that removes ads from the service. Of the company’s $921 million in revenue last year, only $188 million came from subscriptions. The rest came from advertisers.

“We understand consumers are curious and we expect as new services are offered people will reach out and try different services,” admitted Herring. “That’s happened many times over the years.”

In spite of challenges from Spotify, Google, Amazon, Apple’s own Beats, and the Jay-Z backed Tidal, Herring noted that Pandora “has been very successful with a lot of competition. We don’t expect that to change… We lead the industry in terms of ad-supported radio and we think that that’s going to be a competitive advantage for years to come.”