Apple Finalising Label Deals For Free iTunes Music Streaming Service

on in Industry News, International News


Apple Finalising Label Deals For Free iTunes Music Streaming Service

Apple’s thwarted plans for its music streaming service, former working title iRadio, may have finally been given the go-ahead, according to CNET.

After running into several problems in its conception, CNET reports that “Apple could sign deals with both Warner Music and Universal Music Group within the next week,” according to two inside sources.

Apple’s proposed music streaming service follows the model of Internet radio service Pandora, the leading music steaming service in America – which launched in Australia last year – and would use a similar ad-supported model, making use of Apple’s own iAds advertising platform for revenue, meaning it would be a free service for users.

Previously referred to in their press as ‘iRadio’, Apple have begun referring to it as the “new streaming service” in negotiations with Warner and Universal. This slight semantic change could mean a shift from its plans to assert itself as primarily an online radio service, like Pandora.

To make it stand out from the ever-growing streaming market, the “new streaming service” will apparently allow listeners to skip back to the start of a song; a function that its competitors don’t allow. Possibly the most interesting feature is its proposed direct links to the iTunes store, giving its users a quick and easy way to buy the music they’ve just been listening to.

This could help repair the potential damage done from their infamously low proposed per-stream rates, which are half of what Pandora offers its artists. Apple’s initial offer was just US 6 cents per 100 songs streamed, falling way under that set by the Copyright Royalty Board, which is 21 cents per 100 songs streamed.

It is these low rates that have contributed to the service’s numerous setbacks, pushing its release date back several times after Sony ATV failed to agree on a per-song royalty fee. Initially set to launch with the iPhone 5 in October last year, the streaming service was absent from the device after Sony ATV boss Martin Bandier and Apple software and services head honcho Eddy Cue couldn’t see eye-to-eye on the issue. 

Now, it appears it is (almost) all systems go with Apple allegedly stating they’re “determined to get all its deals signed in time for a summer rollout.

Plans then arose to launch “the new streaming service” with the iTunes 11, aimed for a November 2012 release, but they too fell through for the same reasons.

Now, it appears it is (almost) all systems go with Apple allegedly stating they’re “determined to get all its deals signed in time for a summer rollout.” Given that their annual Worldwide Developers Conference is expected to take place in June, it would make sense to launch it there, as The Next Web points out.

It is worth noting that major label Sony ATV is the only one out of “the big three” major record labels that is absent from the reported deal to be signed this week. Given their ongoing disagreements, one could assume that Apple will go ahead with the streaming service without them, as a matter of urgency.

If nothing else, such measures are indicative of the pressure the IT giant is facing to get into the music streaming market, especially if they’re willing to do it without one of the world’s biggest labels on board.

It’s almost a matter of “damned if you do, damned if you don’t” for Apple, as even if they wait to reach an agreement with Sony ATV, that would then put them even further behind in what is an ever-increasingly competitive market. However, without the backing of such an industry giant, users may question the service’s credibility.

Whenever it happens, good news for consumers is that the Apple wants to make its music service globally available as soon as possible, with CNET claiming “Apple is hoping to quickly unveil the service in up to a dozen territories, according to sources, including the U.K, France, Germany, Australia, and Japan.”

There’s no faulting the growing cultural impact and importance of music streaming services, shown both by the number of big companies looking to enter the market – including Amazon, Google, Twitter, and Beats Electronics’ Trent Reznor-helmed ‘Daisy’ - and the most recent industry reports.

The IFPI’s Digital Music Report showed subscription services experienced a 44% rise, with 20 million paying subscribers worldwide expecting to help account for 10% of digital music revenues, while the RIAA’s own recent report demonstrates the same services – which it labels ‘access models’ - accounted for over $1 billion in music sales in 2012 and a 15% share.

Also in America, a recent survey from the NPD Group shows that streaming services are as popular as radio now among those aged under 35, with 23% of those surveyed using services like Spotify, iHeartRadio, and especially Pandora (with a nearly 40% share), almost as much as traditional radio at 24%.


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