Spotify, Pandora will continue to struggle for margin, expert says.
FORTUNE — Apple’s AAPL potential purchase of Beats Electronics — the headphone and speaker manufacturer and music streaming service founded by hip-hop legend Dr. Dre and music producer Jimmy Iovine — could spell trouble for some of Beats’ rivals.
Other headphone manufacturers, such as Skullcandy SKUL and Harman HAR , will likely be affected “very little in the short-term,” said Aram Sinnreich, an assistant professor at Rutgers University who writes about music, technology, and media.
However, the future might not look quite so rosy for other streaming services, such as Spotify and Pandora P .
“They’re not making money,” Sinnreich said. “But Apple can afford to lose money on music the way they always have.”
MORE: Will Apple buy Beats?
For years, Apple’s music business has been based on purchased, downloaded songs. Now, though, consumers are far more interested in streaming services of the type Apple would get in a Beats acquisition.
“Apple was kind of artificially buoyed for the last decade by having created this download market,” said Sinnreich. “The future is clearly in streaming.”
Despite the streaming market being “Apple’s market to lose,” Sinnreich said, they’ve not been able to capitalize on it. iTunes radio, launched in 2013, has not been a roaring success.
For some, the question is why Apple went after Beats in particular. On CNBC Friday, Jim Cramer asked why Apple didn’t spend a bit more money to acquire Pandora. Sinnreich said Pandora was, frankly, “a little long in the tooth.”
Pandora can’t offer on-demand streaming, or algorithm-determined playlists based on tastes. Consumers “want to be able to order the content that they’re interested in,” Sinnreich said.
Sinnreich also noted that the battle for the streaming market really boils down to two experiences: the one in the car, and the one in the living room. In the car, music is the primary content, while in the living room it is on-demand video. If he were Spotify, Sinnreich said, he’d diversify his offerings, bringing the fight into the living room to compete with services such as Netflix, Hulu Plus and Amazon Prime. This would be an especially good move if the rumors of Netflix getting into the streaming music game turn out to be true.
“I think it makes sense for streaming services to battle with Netflix on their own terms,” he said.
Right now, music services like Spotify are hoping to eke out a margin on streaming music, something Sinnreich just doesn’t see happening.