The Deal: Apple Plays Disrupter Again with iTunes Radio

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NEW YORK (The Deal) -- No, this is not the Second Coming. The launch Wednesday, Sept. 18, of iTunes Radio -- part of Apple's new operating system -- won't upend the music industry in ways remotely similar to when iTunes and its 99 cent downloads burst on the scene in 2001. Not by a long shot.

But neither should iTunes Radio be dismissed as just one more over-hyped Apple product launch designed to keep ear-bud-wearing natives restless.

Apple's streaming music service, which will take months to roll out, is another major challenge to market leader Pandora Media . It's also guaranteed to further shake up other digital music providers at a time when they can ill afford any more rumble. This is, after all, Apple. All those millions of iTunes users will find it hard to resist.

The environment in digital music streaming is unsettled. So, you may ask, what else is new? After all, the music industry seems to be in a perpetual state of disarray. True, although these days, the firmament appears especially chaotic. Witness the following:

On Monday, Pandora announced a secondary stock offering that could easily raise more than $300 million, based on Wednesday's 3:30 p.m. Eastern Daylight Time price of $25.79.

The additional capital will be plowed into local advertising sales support. However, in a report Tuesday, Rich Tullo, Albert Fried & Co. LLC's director of research, wrote that he believes Pandora could also use its funds to acquire other companies. He singled out two, much smaller competitors, Songza, and Raditaz. Or, Tullo suggested, Pandora could expand its sophisticated analytics into other forms of media, such as films and books.

Pandora attracts a remarkable audience of more than 70 million, but has trouble turning that marketplace into a profit. For the six months ended July 31, 2013, Pandora lost $36.4 million on revenue of $282.9 million.

It's engaged in a bruising fight to cut the amount of royalties it pays songwriters and publishers, a tactic that has turned Pandora from musician's friend to foe. On that front, Pandora scored a legal victory Tuesday. A federal court judge ruled music publishers couldn't withdraw so-called new media rights of their works from American Society of Composers, Authors and Publishers, or ASCAP, and threaten to withhold these songs, in order to negotiate directly on rates Pandora and other Internet radio services must pay.