Apple’s long-awaited “iRadio” service may launch next week at WWDC, according to separate reports this weekend from The New York Times and The Wall Street Journal. The tough negotiations that have plagued the company’s efforts to roll out its Pandora-like streaming music service continue, however, and sources say that only two of the three major record labels have signed on.
From The New York Times:
After months of stalled negotiations over its planned Internet radio service, Apple is pushing to complete licensing deals with music companies so it can reveal the service as early as next week, according to people briefed on the talks.
Although long a proponent of à la carte song purchases, Apple hopes to capture a new market by launching an online radio service. Similar to existing options such as Pandora, “iRadio” will allow users to listen to custom “stations.” The stations will play music of a user-defined genre, but users will have no explicit control over which artists or songs are played and when. Unlike traditional terrestrial radio, however, online radio services do allow users to “skip” a certain number of songs in a given time period (for Pandora, it’s six per hour per station).
Rumblings of Apple’s service date back to 2010, but reports claim that the Cupertino company has had a hard time convincing labels to join the cause. The success of the iTunes Store and the power and influence that Apple wields in the realm of digital music sales have made labels wary of handing Apple greater market share and influence. Instead, labels have worked to help competing services, such as those from Amazon and Google, strengthen their position to better check Apple’s digital media juggernaut. After years of negotiations, however, it appears that Apple has finally convinced the labels to let them into the streaming music game.
Universal Music and Warner Music Group have reportedly agreed to Apple’s terms while the remaining third of the “Big Three” labels, Sony Music Entertainment, is still holding out. The primary sticking points are said to be the cost per streamed song that Apple is willing to pay and the way that labels will be compensated for skipped songs.
The Wall Street Journal claims to have obtained some details on Apple’s agreements with Warner, the latest label to sign on:
Under the deal, Apple will give Warner Music Group’s publishing arm 10% of ad revenue — more than twice what Internet radio giant Pandora Media Inc. pays major music publishers. Warner’s terms with Apple could pave the way for other major publishing deals to follow.
While sources declined to confirm Apple’s plans, they do report that the company is “eager” to get the final deal with Sony in place for WWDC, which kicks off next Monday, June 10. Sources suggest that Apple may even choose to launch the service regardless of Sony’s participation. Such a move would serve to put Apple in the news again and place public pressure on Sony to close a deal.
While the market will have to wait to see what Apple CEO Tim Cook unveils next Monday, reports from multiple sources indicate that “iRadio” will be a free, ad-supported service It will also offer seamless integration with users’ existing iTunes content, as well as tie directly into the iTunes Store, allowing users to easily purchase tracks they like.
As for Pandora, some argue that the company could survive Apple’s entrance into the Internet radio market and point to Apple’s past failures with online services: MobileMe and Ping. But the market could easily wake up next week to a world where every iDevice gains the ability to play free, customizable streaming music, and Pandora may not be long for such a world.