There's been a lot of talk about Apple's iRadio, even though the computer giant hasn't officially announced the service. The latest comes from The Wall Street Journal's AllThingsD Web site, which says Sony Music has signed on to the service.
AllThingsD cites "a person familiar with negotiations between the two companies" in a story that suggests Apple now has agreements with all three major music labels. With the Apple's Worldwide Developers Conference next week, the company seems to be putting the final pieces in place for a major announcement.
According to Bloomberg News, Universal Music and Warner Music Group have already agreed to deals with Apple to be part of the coming service. What's not clear is Apple's plans for advertising. But Bloomberg said, "iRadio will allow users to build custom stations based on an artist or genre that draws on music from the company's iTunes library."
Apple's Extra Incentive
Billboard reports that "the majors publishers had looked like they were going to be the holdout because Apple initially offered to pay them a rate of 4.1 percent of its advertising revenue, while the publishers had been withdrawing digital rights from the U.S. performance rights organizations BMI and ASCAP because they wanted higher rates. BMG, Sony/ATV, Universal Music and Warner/Chappell executives had privately said they were seeking rates of 10 percent to 15 percent of iRadio's advertising revenue. But when Apple agreed to a 10 percent rate, Warner/Chappell last week signed the deal and now so has Sony/ATV."
Ross Rubin, principle analyst at Reticle Research, said streaming music services have become a key way to drive music discovery and listening.
"Pandora in particular has been a perennially top app in Apple's app store and on many other platforms, even one of the few apps we see consumers use often on smart TVs," Rubin told us. "Apple, of course, has extra incentive to offer such a service for music discovery since it can tightly tie it into iTunes to help drive potential sales of tracks."
Apple's Many Rivals
Rubin also pointed to Apple's rivals getting into the streaming music space. Rivals meaning Google with its Google All Access music offering and Microsoft's Xbox Music that offers limited on-demand streaming.
"Nokia has offers free streaming music with track-skipping in Nokia Music that has the added benefit of offline playlist creation. Clearly, making the entire offering free or offering a free tier removes an important barrier to adoption," Rubin said.
"Pandora has shown that it's difficult to make money while relying heavily on streaming, but it may be more worthwhile to a handset company such as Nokia or Apple as a value-add."
Posted: 2013-06-16 @ 8:29am PT
I think this is going to be interesting, I mean I'm sure they have something up their sleeve, right? To be honest I'm not to keen about the radio model because I like to pick my own songs when I stream music so I think I'll be sticking to the music streaming service I'm using now, Torch Music.