Apple Close To Signing Deals With Record Labels For ‘iRadio’ Streaming Service

Last week we reported that Apple was pushing hard to launch its Pandora-like music streaming service this summer.

CNET now reports that according to people “familiar with the negotiations” Apple is close to signing deals with both Warner Music and Universal Music Group.

The report however notes that Apple still needs to strike a deal with Sony Music Group and music publishers, however it is still aiming to launch the service this summer.

CNET provides the following details of Apple’s upcoming music streaming service:

CNET has learned that Apple’s planned music service would offer new revenue streams as well. 

That includes a quick way for consumers to buy a song they hear, potentially boosting download sales from iTunes, as well as a revenue share of new audio ads Apple is planning to add to the free service, according to sources. The product would be tied to iTunes, and available on mobile devices. [..]

[..] The service, according to sources, most closely resembles Pandora because it doesn’t offer on-demand listening. Apple is building some unique features, such as the ability to jump back to the beginning of a song, according to one person briefed on the company’s plans. 

The New York Post had reported last month that Apple had made an initial offer to record labels of about 6 cents per 100 songs streamed, which was lower than the 12 cents per 100 songs paid by Pandora and significantly lower than the 35 cents per 100 songs paid by Spotify. According to that report, music labels had objected to the offer and were expecting at least 21 cents per 100 songs streamed that has been set by the Copyright Royalty Board. CNET now claims that Apple has agreed to pay labels more than what they get from Pandora.

Rumors of Apple launching a new Pandora-like music streaming service have been prevalent ever since the company acquired a few years back. I’m assuming that Apple is planning to include this feature in iOS 7, which is expected to be unveiled at the WWDC 2013, which usually takes place in June.

Apple is not the only one planning to launch the music streaming service, a report in February claimed that Google is also working on a similar service.

Though it’s quite difficult to make money in the ad-supported music streaming service, it makes sense for Apple and Google to bundle the service with devices as it could drive more stickiness to their platform and encourage more hardware sales.


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