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-- the Wall Street Journal saying apple is in talks to license its own customized radio streaming service to rival -- Lot of other online music services.
-- Constantin house is the director of international portfolio management of riverfront investment group his firm.
All shares of apple and -- Sam Tarantino he's the CEO of online music service.
Group shark welcome to -- the view as several for this one do you when -- -- publicly traded but pandora is.
And their stock really took a hit on this news did it put the fear in your heart to hear that apple may enter your space.
Obviously apple does a lot of things very well -- you know this -- the competitors in the space.
-- pandora and -- the last ten years there's probably an analyst of a hundred people that have come and gone in this world so.
It's it's by no means trivial to to do anything in the music business but.
Apple does what they do well enough where our offices all apple computers -- I don't doubt that they'll have their cover other nations based.
Chris let's talk about pandora's we look at the gloomy chart here.
You know it would it -- that pandora was just the stock anyway was just getting on its feet.
After a pretty tough twelve months they're actually pretty tough since they issued directive they were finally getting -- a couple of and then this happens user.
Was this fatal blow to the stock -- could it make you come back.
It's a good question you know in.
Full disclosure I my firm doesn't generally research companies that have less and a five year track record of being publicly traded so pandora's not a -- a look at nearly as much as say apple which we don't for a long time.
I think it's probably a little bit premature.
It's tinted judged so harshly simply because we don't know what Apple's plans are in the space you know we've seen the headlines we don't have any details.
And you know for instance if apple came out -- with a a program that was simply a subscription based service with the cost attached to it vs the pandora which they're based service I believe it's free at least that service -- -- street.
They may not necessarily be direct competitors so I think it's probably a little bit premature to judge.
On the impact that it's gonna have on a company like pandora.
Certainly the market from ten says she first and ask questions later which is why I think you're seeing such a harsh reaction but.
-- I think pandora does have.
Some things going for -- you know primarily the fact that they've had.
Pretty decent first mover advantage in the space and and and they've done some good things as far as I know with licensing to the automobile manufacturers etc.
And it's a product of people like to use I've I'm.
Consumer both -- shark and pandora on my apple products and and I find those services.
Our have a great values to me as a consumer so I just think it's a little probably premature to judge -- -- Now there's there's one of your customers that's awesome I mean you have 38 million active users every month and your mandate as it says is to help bridge the growing gap between artists and consumers.
And you want to create for consumers an opportunity where they can listen to exactly the music they want.
Here's where I would get nervous -- you and tell me why I'm wrong Siam.
Apple already has all that music on iTunes at its fingertips.
Couldn't think just wipe that out for you guys in the -- -- -- the world than in the blink of an -- pick up their act together.
Yeah for sure there's different business models in this space -- -- we are not supported you know -- business that's kind of more along lines where YouTube is doing where you know where.
Creating artist pages.
A long lines what MySpace is doing the difference here is.
There's tons of subscription businesses so when we say streaming service that's a very broad.
Category and it can be commitment to meet talking about a music subscription business that is more long lines with Spotify in.
You know -- rhapsody had done by.
I think without specifics -- what Apple's actually negotiating its its hard to say mean there's but it said there's tons of different streaming services with -- various business model it's just it would be hard.
The other a billion dollar a year business to be hard to see them just suddenly cannibalize all that for free service overnight.
Well Chris let's let's pull back and look at apple for -- because.
It it may be possible that they could actually -- every single piece every single segment.
Of the home entertainment.
Business it's it's possible they could.
But is it reasonable and when it when you think of the folks out of Washington and worried about monopolies -- -- you have might somebody stepped in to stop that.
I think it's very reasonable to expect that Apple's gonna be huge player in and what we call that the digital living term.
I think that's one of their implicit goals is to own that space and I think that.
Out of any tech company that I research I think they've got the best shot at doing it they have by far the best user experience of any hardware company that I know.
I name done so much in terms of their ecosystem and in terms of linking all -- different devices together linking the content together.
With the hardware and just making -- work seamlessly so.
Not you don't have to be attacker to get the products to work so I wouldn't bet against apple in terms of -- -- -- that digital living room and and that's precisely one of the reasons that we've been long the stock for as long as we have yeah.
-- apple tends to not make lots of acquisitions and -- and when they do their very laser focus but.
If they came to you I know you're only 25 this would be maybe a dream or not if you wanna keep running group -- if they came to and said we we -- -- buy you what would you say.
It's hard to say up.
I'm scared and in this business to change how artists and consumers interact in.
You know film went along with the vision of course -- -- in a conversation we had their but remember this.
-- knows -- apple is this you know became -- -- and anything they go into with suddenly successful they've had a lot of failures they're paying service on iTunes hasn't necessarily had traction that they expected and -- I think when it comes to social they haven't really -- social on on any really other products.
They -- the NAV they make a great hardware great software great user experience that Nixon -- a little bit at the same time.
You know social and and content are two areas that impact in terms of building contents the -- is that they're not really into yet.
All right this isn't fair to my producers because or give me -- rapper Chris I got to ask is it possible that apple might buy -- -- quickly.
-- -- -- It's possible I'm not sure that it's probable though because I think their history has been to do smaller -- niche acquisitions.
So I I suspect this is something that they would either make a smaller acquisition or probably more more probably build in house than to do -- a multi billion dollar certainly a very exciting element of the entertainment industry thank you very much Chris constant -- suburban front investment group and sanitary -- a 25 year old entrepreneur.
From groups check.
Our current good to see you both guys --