Risky Money's  Instablog

Risky Money
Send Message
I am a keen observer of the markets and international trends. I take a special interest in energy stocks and relatively risky companies. Apart from reading and writing about investment, I work as a freelance writer and psychologist.
  • The Internet Radio Business And Apple's Fortunes In India 1 comment
    Sep 19, 2013 6:10 PM | about stocks: P, SIRI, AAPL

    Apple's (NASDAQ:AAPL) iOS 7 was announced recently and more than 500 million people have begun to download and install it. iOS 7 has not necessarily received rave reviews but overall, the reception has been satisfactory.

    A major but often overlooked feature of iOS 7 is iTunes Radio, which allows people to listen to personalized radio stations not only on their devices, but also on their desktops, be it Macs or PCs. However, iTunes Radio is currently available only in the U.S. In this article, I shall discuss why iTunes Radio may prove to be the single most profitable venture for Apple in India.

    Who are the Internet radio service providers in India?

    Indians currently do not have access to Pandora (NYSE:P), Spotify or Sirius XM Radio (NASDAQ:SIRI). India is one of the largest countries where English is an official language, even though it is not spoken by a majority of people. International music is popular among youth and adults in cities like Bangalore, Mumbai, Kolkata and Pune, where a large chunk of the English speaking population resides.

    Currently, Indians who like to tune into personalized Internet radio stations can only do so when they use Grooveshark or Jango, both of which are not popular in the country. Last.fm was available in India on a paid subscription model but is no longer offered in the country. Thus, there is a huge demand for personalized radio services that offer international music to Indians.

    Apple and the Indian Internet radio market

    The country of over a billion people has only 150 million Internet users, which is again a formidable number. Most people who use the Internet in India tend to be located in urban centers, who are well aware of Internet radio stations and their marketability. Apple has said that iTunes Radio will be available only in the U.S. initially but will be made available in the rest of the world later on.

    iTunes Store did not sell music or videos until late 2012 in India. Apple's iTunes Store not only sells international music, but also regional language music written and sung in languages like Hindi, Tamil, Kannada among others. Obviously, Apple knows the enormous size of the country and that there is a growing awareness among Indians not to use pirated music.

    When will iTunes Radio be available in India?

    Apple has not revealed any information about when it plans to roll out iTunes Radio in India. In fact, it has not even mentioned when it will launch iTunes Radio in other countries like U.K. and France. However, Apple eventually makes all its services available across the world and with that logic, iTunes Radio should be available with the next major software update.

    When iTunes Radio is launched in India, it will have customizable local radio stations to appeal to the masses as well. Apple will follow its previous method of making Indian popular music available on its iTunes Store, so that Apple users with Indian accounts can tune into Indian music or create their own personalized radio stations. `With almost 150 million internet users in India, and the possession of an Apple device not being mandatory, iTunes Radio could possibly be Apple's most successful venture in India.

    Satellite radio takes a beating

    Sirius XM only has 25 million subscribers. Moreover, satellite radio may not be all that popular in the coming years. People are moving towards personalized Internet radio stations and satellite broadcasting companies like Sirius XM will have to change quickly.

    In fact, MySXM, a personalized online radio service was launched by Sirius XM in April 2013. Sirius XM Radio has a market cap of $25 billion and an enterprise value of $26 billion. It has decent profitability numbers with a profit margin of 13.34% and an operating margin of 27%. However, I would be very cautious about this stock as satellite radio's future is murky and Sirius XM has too many competitors in the Internet radio business.

    Pandora doesn't operate in India

    Pandora on the other may not be affected by iTunes Radio because Pandora offers a better radio listening experience. iTunes Radio has a lot of shortcomings which Apple may fix in the coming months. Though Pandora investors feared the worst when iTunes Radio was announced by Apple, nothing catastrophic has really happened to the company.

    Pandora gained nearly 7% after iOS7 was launched, which suggests that all those doom and gloom rumors were uncalled for. Pandora certainly competes with Apple in the Internet radio business and may even have a few advantages, but this company is not likely to offer internet radio services in countries like India, which Apple probably will in the near future.


    Apple has virtually no competitors in the personalized Internet radio business in Indian market. This leaves Apple with an advantageous situation which it will certainly make use of. In the coming months, we may see iTunes Radio being offered in countries like India, where there are far too many people waiting for such radio listening experiences. As iTunes Radio is offered on an ad revenue model, Apple stands to make a decent sum of money, along with purchases that listeners make while listening to various default and personalized stations.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: P, SIRI, AAPL
Back To Risky Money's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • VictorHAustin
    , contributor
    Comments (824) | Send Message
    Thanks for the info and point of view.


    I'm not up on radio. Could you briefly bullet a couple of the Pandora advantages you see? Thanks.
    20 Sep 2013, 05:41 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.