updated 05:11 pm EDT, Thu October 25, 2012
Apple is said to be in talks with music labels or revenue sharing
Apple is said to be in deep-level negotiations with some major music labels to launch an ad-supported Internet radio service, not unlike Pandora. According to a Thursday Bloomberg report, talks could end by mid-November and the service arrive in the first quarter of 2013, sources who wish to remain unnamed have said. Compared to Pandora, which seems to be the biggest competitor to this upcoming service, Apple would get quicker access to new songs.
The service would also likely be more flexible, not imposing as many limitations as Pandora, which gives listeners a maximum amount of song skips in a given period of time.
Labels that are said to be involved include Universal Music Group, Warner Music Group, and Sony Corp's music division, with executives said to have visited Apple's Cupertino headquarters in California over the last few weeks. As in some other current apps, Apple hopes listeners will buy the streaming music from its iTunes store thanks to convenient links. Automatically generated playlists will also let users listen to what the system thinks they will enjoy.
The labels and Apple are working on figuring out the advertising model. Recording companies are said to be seeking an upfront fee along with a percentage of ad sales and the ability to plug in their own commercials to promote the artists they represent. Apple wants to promote its iAd mobile advertising platform and use it to push iTunes sales.
Digital music sales are growing, while hard copy album sales have dropped, so there is a definite shift in the industry.