Apple To Sign Deals With Major Music Labels For iRadio
Apple wants to make its own music streaming service, similar to Pandora and it wants to release it during this year’s summer. However, before launching the service it needs to sign deals with major music labels, which will ensure content for its music streaming service. A few sources that apparently are very close to the negotiations, have said that Apple is about to sign a deal with two major music labels; the music labels are Warner Music and Universal Music Group and the deals could be signed as soon as next week. However, the anonymous sources remark that the deals could still fall apart as they are not set in stone and they are still negotiating so they may not reach an agreement. There is also another aspect that the sources have noted and that is that Apple also needs to sign a deal with Sony Music Group, a very big music label.
About the negotiations, the sources have said that Apple has been trying to get as much as they can from the deals; initial reports indicated that Apple was offering to pay half of what Pandora currently pays the labels per 100 songs streamed. Pandora pays 12 cents per 100 songs streamed and Apple offered to pay only 6 cents per 100 songs streamed. to give perspective, Spotify pays 35 cents per 100 songs streamed, which is a significantly higher amount than what Apple offered. Needless to say the music labels were not pleased as they were not expecting a sum below 21 cents per 100 streamed songs which is the amount set by the Copyright Royalty Board.
There is a catch however: apparently, Apple’s new streaming service will offer additional revenue options besides the ‘per 100 songs streamed’ money. It seems that one of these new options is a fast and easy way for customers to buy a song they listened and liked – this will increase downloads from iTunes (as it seems that Apple’s iRadio, or whatever name the service will receive, will be tied to iTunes and made available on the go for mobile devices). Another new revenue form for music labels is a share of the audio ads that are supposed to be introduced in the free version of Apple’s iRadio service.
Apple wants to sign the deals as soon as possible, as they are set on releasing the new service this summer. They also intend to make the service available in as many regions as possible; besides the United States, it appears that Apple also wants to have the service ready for Japan, Australia, Germany, France and the United Kingdom among many other countries. The iRadio service might be officially announced at this year’s Apple developers conference (which will take place at the beginning of June, this year) similarly to other Apple services (such as the iCloud service) unveiled at the same conference.
Rumors about an Apple iRadio service have started to surface as soon as the company bought Lala.com, a few years ago. iRadio is the name attributed by the press to this rumored new Apple service, however some of the sources mentioned that during negotiations Apple refers to the service as a ‘new streaming service‘. According to rumors, Apple intends to include a few new and unique features in this service, among which there is the possibility to jump to the beginning of a song you are listening.
The music market is getting a bit crowded as not only Apple, but also Google is has its own service in development; not to mention there are already established on demand music straming services that offer both free and paid options – among them we should name Spotify, Pandora and also RDIO. As we just mentioned, there are rumors from two months ago that Google is actually working on a similar on demand music streaming service that will be part of youtube. According to multiple sources, Google will launch the service for desktop computers but also Android based devices. It is understandable that Google and Apple will both launch their music streaming services for mobile devices – this decision will help attract more users to their OS ecosystem and also boost hardware sales. We are already anticipating a fierce competition between all these on demand music streaming services this summer and that is good news as we will get more options to choose from.
