Apple is apparently in negotiations to launch a long-rumored ‘iRadio’ service, but is looking to pay significantly less royalties for the music than some of its competitors are paying for comparable services. A report from the New York Post is suggesting that one of the ways in which Apple seeks to make its own streaming radio service successful is by offering a royalty rate that is around six cents per one hundred songs streamed. This is around half of the twelve cents per one hundred songs paid by services like Pandora.
In contrast, Spotify, the music service that offers complete on-demand streaming of its music library pays around thirty five cents per one hundred songs served to users. The new Apple service is apparently being targeted as another platform for iAds and was initially supposed to launch alongside the iPhone 5, but complex negotiations have meant that the service is not yet ready for public release.
The report suggests that Apple may make the iRadio service part of iTunes Match, which currently costs $24.99 per year. However, it is unclear whether any price increases would be associated with iRadio, particularly given that the pricing negotiations are still being conducted.
Pandora was recently reported to be renegotiating its royalty payments, seeking to lower them from the current level, with the implication that they will limiting the listening hours for their ad-supported model to 40 hours per month. In addition, Spotify is seeking to bring free streaming to iOS devices, as well as desktop devices, a service which currently costs $9.99 per month for both, or is free for desktop streaming only.
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