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Apple Pushing to Complete Record Deals for Streaming Music Service Launch at WWDC

itunes_radio_iconThe New York Times reports that Apple is still hoping to launch its much-rumored streaming music service at its Worldwide Developers Conference (WWDC) next week, pressing to complete deals with record labels that would allow the company to announce the service.
Apple’s service, a Pandora-like feature that would tailor streams of music to each user’s taste, has been planned since at least last summer. But Apple has made little progress with record labels and music publishers, which have been seeking higher royalty rates and guaranteed minimum payments, according to these people, who spoke anonymously about the private talks.

While it is still at odds with some music companies over deal terms, Apple is said to be eager to get the licenses in time to unveil the service — nicknamed iRadio by the technology press — at its annual developers conference, which begins June 10 in San Francisco.
Two weeks ago, The Verge reported that Apple might be unable to launch the service at WWDC due to continued difficulties with the negotiations, but it seems that Apple may be making a strong last-minute effort to meet that goal.

Apple had previously signed a deal with Universal Music, the world's largest record label, and the Times indicates that Apple signed a deal with Warner Music Group this weekend. Negotiations with other labels and publishers are continuing.

Apple's streaming music service is said to be a free, ad-supported offering, with the labels reportedly seeking similar revenue rates to that seen from Pandora, although Apple is seeking more extensive licenses to provide more flexibility for users.

Update 7:08 PM: The Wall Street Journal has more on Apple's deal with Warner:
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.

Apple has indicated to people involved in the negotiations that the service could be announced at its annual developers conference, which begins June 10 in San Francisco.

Top Rated Comments

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82 months ago

Late to the party with an inferior product. Good job, Apple.

Judging about something you have no knowledge about.
Rating: 23 Votes
82 months ago

Hopefully they integrate iTunes Ping well. A service like this only works if there is a social aspect... sharing tracks with friends, listening histories, etc

You do realise ping is dead?
Rating: 19 Votes
82 months ago

This seems more like follow the leader, rather than leader of the gang.

Ah so just like Google then. :D

Seriously I'd rather they wait and get it right than rush just to launch something for WWDC.
Rating: 8 Votes
82 months ago
...and it'll probably take forever to reach the UK.
Rating: 8 Votes
82 months ago

Late to the party with an inferior product. Good job, Apple.

Haha people like you always crack me up, bravo, carry on trolling.
Rating: 8 Votes
82 months ago
I would rather have a movie / TV service than a music service for subscription.
Rating: 7 Votes
82 months ago

This seems more like follow the leader, rather than leader of the gang.

All of Apple products are follow the leader and always have been. The iPod was not the 1st music player, iPad not the 1st tablet. The reason Apple becomes the leader of the gang is because their rendition of these products is far better in every way than what has come before. This is Apple's success story, not being 1st, but being best. ;)
Rating: 7 Votes
82 months ago

Here's what I see:

Around every quarterly report from the major cell phone service providers who are partnered with Apple, we always see the same 2 basic commentaries: 1) great year with lots of sales of iPhone and 2) subsidizing iPhone is very expensive relative to all of the other phones. In short, they love the revenues that iPhone helps deliver but hate how much they have to pay Apple in the subsidy relative to how much other smart phones cost them.

Then there's this growing sense of "where's the beef?" in terms of the classic view of Apple's big innovations reputation. Think about it. How often have we heard that there is very little money for Apple in the iTunes store music sales... that iTunes exists to help sell hardware?

Now, why digital radio? It's already led by some pretty strong players in Pandora & Spotify. There's still completely free* radio over the air. There's also Sirius for the subscription hounds wanting commercial free. Is radio really that important to the masses anymore- especially in devices that you can load with all of your favorite music commercial free? Some might argue about "discovery" but can't we discover new music we like with 30-second previews of any song in the iTunes store? Or from our friends playing something we like? Or from free radio? Or when we hear the tune on television, at the mall, etc?

We also note that the bulk of Apple's business is heavily dependent on iDevices, especially iPhone. Since the bulk of who actually directly pays for the iPhone is not the classic customer (us consumers) but this handful of cell service partners, it is obviously paramount to keep that very big cash cow as happy as possible.

So, what do you do when you hear the cash cow grumbling about the relative expense of iPhone vs. other smart phones they also carry? Being Apple, you don't cut the cost of each phone to be more competitive and kill the Apple margin. So what else can you do? Well, being Apple, you could turn the internal innovation machinery on to focus on how to make those partners more revenues from iPhone.

How can AT&T, Verizon, etc make more revenues? The easy way is to get the masses to burn more data because with the tier limits in place, burning into higher tiers yields more money for them.

What has been the heralded iDevice "big things" from Apple over the last few years: Siri, iMessage, Maps, iCloud, Facetime, etc. Now, here comes iRadio. What do they ALL have in common? A high dependency on internet data burn. Each doesn't work (or work very well) without a live connection to data.

iRadio seems poised to be a monster in terms of data burn. Stream all that music from "the cloud" seems to be a great recipe for getting average data burn per customer up so that we are generally paying up for the next level(s) tiers.

Pair that with the wonders of LTE- which seems to be AT&T, Verizons, etc contribution to helping us chew through more data faster than ever, and these kinds of "big innovations" seem ideal for putting much more money in AT&T, Verizon, etc pockets.

I'm a huge music lover. HUGE. But radio seems like it's about 1950-1985. I occasionally turn on Pandora or Spotify but, as much as I love music, neither really gets me going. There's also all that fantastic Sirius music beaming down at me from space, but it's ready availability doesn't motivate me to shell out the monthly fee to get it either. And while I know I'm not the market for this iRadio, is there really a market that are going to gush all over digital streaming radio that has the Apple brand stamped on it?

When I look at it, I see it throwing another bone at the cell service partners much more than bringing some revolutionary resurrection of radio to a hungry market just dying for more radio. I just don't see an Apple Pandora or an Apple Spotify being that great. Is it another Ping or MobileMe? Is it half-baked like Maps or even Siri? Or is it just more of that magical innovation machine focused in the wrong place (how to make the cell service partners happier by innovating things that will almost certainly yield more profits for them).

Some people talk about Apple losing their way by not innovating "next big things" as they have in the past. It does feel past due for a whopper-level innovation like an iPod, iPhone or iPad to me too. I see rumors like this iRadio and wonder if Apple hasn't lost it's way at all- it's just focused it's innovation machine on where the bulk of it's bread is buttered.

Prediction of the next, next big thing after iRadio: iVideo as a streaming video "innovation" in a world with hard (tight) tiers for cellular service usage is a AT&T, Verizon, etc revenue-boosting dream to end all dreams. We can burn 2GB in a single movie stream... even easier at retina-quality resolutions.

Whether right or wrong: I wish the next, next big thing out of Apple would not be something that seems innovated to help AT&T, Verizon, etc make much more money. It would be good to get back to industry disruptive innovations rather than duopoly-fueling ones.

Would you please elaborate?

Your post wasn't quite long enough.

If your post is longer than the article it's not likely it's going to be read.
But please feel free to expand on your posting.
Rating: 6 Votes
82 months ago
meh wake me up when i can listen to the whole itunes catalogue with my iTunes Match subscription otherwise apple will be the laughing stock with everyone else but them offering the best of both worlds in one package.

i can already see the headlines "Apple catching up with everyone else but .. not really"
Rating: 4 Votes
82 months ago

I'm happy it's allegedly going to be more Pandora than Spotify. When I'm driving or at my desk at work, I don't want to actively pick songs. I'd rather just specify a genre or song or artist and let it go.

Spotify does that, too.
Rating: 4 Votes

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