Apple finally jumped into the free music streaming frey today at the opening of the four day Apple Worldwide Developers Conference, putting the world’s leading music download service into the internet radio business dominated by Pandora and Spotify.
Initially to be available in just the U.S. on mobile phones, tablets and computers, Apple’s long-rumored, advertiser-supported iRadio service was made possible last week when Sony inked deals covering both its' recorded music operation Sony Music Entertainment and its’ publishing wing Sony/ATV Music which now includes the giant EMI Music Publishing operation.
The other two music majors - Warner Music Group and Universal Music Group – previously negotiated terms with Apple, which Billboard magazine reports will pay the labels either a 50/50 share of advertising revenues (after 10-20% expenses) or, if higher, cumulative revenues from pay-per-play royalties. Apple will reportedly pay slightly more than the $0.0012 cents per song/per listener that Pandora forks over - maybe $0.00125 or $0.0013 a pop - but Apple may not be paying for playlist songs that are skipped by the listener, as Pandora still covers.
Apple can afford to be generous, as the iRadio service will include a “buy” button to purchase/download a track from the iTunes store. Using the vast storehouse of knowledge about its 500 million (world-wide) iTunes customers, Apple also will be able to create custom stations closely aligned with listeners tastes, introducing them to new releases and affinity (stylistically aligned) artists likely to promote yet more “buys.” A much rumored about, much upgraded Apple TV service could benefit from the iRadio service and data accumulation, too, targeting music videos and concert ticket offers to the shared customer base.