Credit: Shutterstock photoRobbie Citrino, Kapitall: As music streaming services battle to gain your business, will one standout in a fragmented market?
Pandora ( P ) , the largest and best known music streaming service, has 250 million registered users and increased its revenue 56% from FY 2012 to 2013.
This, however, seems to obscure the inefficiencies of streaming services: the more users they gain the greater their financial losses widen. Pandora's rose to $38 million in 2013.
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Spotify, another player in the industry, also does not turn a profit, as just 25% of its 40 million person user base actually pays for the service - a key metric Spotify must raise in order to make its operations viable in the long term.
Meanwhile, as investors speculate about whether a merger, acquisition or IPO is in the works, company-eater Google ( GOOGL ) has chosen to stay out of the field while other big tech firms like Amazon ( AMZN ) and Apple ( AAPL ) play ball.
Hailed as the original innovator in digital music, Apple is looking to reinvent itself and gain a new source of revenue through its acquisition of Beats, a company most known for its stylish headphones, but which also has a fairly small streaming service.
The largest hardware company by market cap has been interested in the area for some time, however; after its disappointing attempt to poach Pandora listeners with iTunes Radio, they are looking for a new way into the market. But for the supposed $3.2 billion purchase price, are the Beats users worth it?
There are far fewer of them. But they are also far more likely than Spotify users to upgrade their accounts and become paying customers.
Could this be money wasted for Apple? Or is Tim Cook about to revolutionize to the music streaming industry? Check out the stocks below to get some ideas.
Click on the interactive chart to view data over time.
How will online streaming's battle for users play out? Use the list below to begin your analysis and let us know what you think in the comments.
1. Pandora Media, Inc. ( P , Earnings , Analysts , Financials ): Operates as an Internet radio company in the United States. Market cap at $5.27B, most recent closing price at $25.54.
2. Amazon.com Inc. ( AMZN , Earnings , Analysts , Financials ): Operates as an online retailer in North America and internationally. Market cap at $141.78B, most recent closing price at $312.24.
3. Apple Inc. ( AAPL , Earnings , Analysts , Financials ): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, related software, services, and third-party digital content applications worldwide. Market cap at $535.01B, most recent closing price at $614.13.
(List compiled by Robbie Citrino, a Kapitall Contributor. Monthly returns sourced from Zacks Investment Research, all other data sourced from Finviz.)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
