Pandora Media Inc. (P:US), the largest U.S. Internet radio service, said its market share increased after Apple Inc. (AAPL:US) unveiled the competing iTunes Radio. The shares rose the most in almost two months.
Hours of listening grew 9 percent last month from September, when the Apple service was introduced, Michael Herring, Pandora’s chief financial officer, said at a Morgan Stanley conference in San Francisco yesterday.
The results show Pandora withstanding Apple’s challenge. The company already dominates rivals including iHeartRadio, from Clear Channel Communications Inc. Pandora’s share of U.S. radio listening expanded to 8.06 percent in October from 7.77 percent when iTunes radio began operating, Herring said.
“October data was in line with our expectations and showed the resilience of our business,” he said.
Pandora, based in Oakland, California, rose (P:US) 8.6 percent to $27.88 at the close in New York, the most since Sept. 12. The stock has more than tripled this year. Apple, based in Cupertino, California, fell 0.3 percent to $525.45.
Pandora streamed 1.47 billion hours of music and other content in October, Herring said. The number of active users, at 70.9 million, fell slightly from the previous month, he said, when the company reported 72.7 million active listeners. Apple said more than 11 million users tried iTunes Radio in the first days after the Sept. 18 start.
Pandora may use some of the almost $400 million raised in a September stock offering for international expansion, Herring also said. Expansion outside the U.S. may require direct licenses with record companies that usually require upfront payments, he said. Pandora operates in the U.S., Australia and New Zealand.
“We hope to prove what we have been doing in Australia and New Zealand is positive for musicians and the overall industry,” Herring said.
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