Rumours that Apple has been speaking to record labels about a Pandora-like streaming service have restarted. Apple was having some difficulty convincing record labels that they should sign up to "iRadio," after they offered them roughly half what other music streaming services offered. While iTunes dominates the music download scene, Apple has no music cloud ability, besides iTunes Match, which syncs songs between iOS devices via iCloud.
The Verge reports that Apple may be close to signing a deal with Universal Music, the largest of the major record companies, that would advance the "iRadio" cause. Apple is also reportedly nearing a deal with Sony Music, which own a vast trove of music, including all of Michael Jackson's work. The talks between Warner and Apple are also making headway.
The streaming service is expected to increase the ease of music discovery for iTunes users, and will boost sales of music. Because the service is like radio, Apple may also include ads, according to The Verge. Apple will not receive a discount from any of the music labels for their music, despite their best attempted. The New York Post published a story claiming Apple was offering 6 cents per 100 streams, half of what Pandora pays. In order to broker the deal, Apple will pay "neck and neck" what Pandora pays, a source told The Verge.
Because of the spread of iTunes and iOS, Apple can easily drive users to their new streaming service, making it a deep threat to Pandora. Streaming music is the only place that Apple has no foot-hold, with Spotify and Pandora taking the lead. Pandora reportedly has over 200 million users, while Spotify claims 20 million total users, 5 million of which pay. In 2013, Apple is expected to sell around 200 million iOS devices.
Apple is expected to release a new version of iOS in June, iOS 7. While changes may be "pretty conservative," or they may not, Apple needs a new headline service or feature, and the streaming radio service may be it.
Source: The Verge