Pandora CFO says Steve Jobs ‘eviscerated the music industry’ with iTunes

pandora cfo mike herring steve jobs itunes pandora1
In the face of a trying week at Pandora HQ, the online radio stalwart’s CFO Mike Herring threw a potshot at the developer of a competing digital music company: Steve Jobs. Yes, the late Apple co-founder who, among so many innovations, helped develop the iTunes MP3 store in 2003.

“[The music industry’s] had a tough 15 years,” said Herring in an earnings call (according to Billboard). “I mean Steve Jobs eviscerated the music industry with the launch of iTunes and it’s been downhill ever since. And the download was supposed to save it, that didn’t happen.”

Not surprisingly, Herring also had negative thoughts on Apple Music, the technology giant’s music streamer which has collected 6.5 million paid subscribers since its June 30 launch. He argued that this is a low number considering that hundreds of millions of phones that come with the app installed. “I guess a few million people do [subscribe], but the reality is you want to get people to choose to do, that is a much bigger trick. You have to have a great product.”

Pandora faces its own difficulties this week as the Copyright Royalty Board decides whether to increase royalties paid to labels and artists. The Internet radio streamer with as many as 79 million active users currently pays 0.14 cents per stream and wants to lower the rate to 0.11 cents per stream. Royalty distributor SoundExchange wants a 79 percent increase in the rate to 0.25 cents per stream. In Q3, Pandora paid 40 percent of its revenue to labels according to Herring. (Notably, the possible rate change wouldn’t affect on-demand streamers like Apple Music or Spotify.)

Sticking to his talking points, Herring said that Pandora would “continue to operate very effectively no matter what the rates are.” That’s a difficult statement to back up, though.

“Anything other than the status quo is going to be dreadful for Pandora, because it means that the challenge for monetizing content is going to be that much higher,” explained media analyst Alice Enders to the New York Times.

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