4/5/13: Apple streaming deal allegedly "low-royalties + ad revenue share"

Paul Maloney
April 5, 2013 - 11:50pm

New reporting from CNet is possibly giving some shape to Apple's much-anticipated streaming music service.

All of these details are sourced from the ever-insightful "people familiar with the negotiations," so none are official. But according to what CNet has heard, Apple is close to settling with Warner Music and Universal Music groups (not yet Sony, nor publishers) for a summer U.S. launch of a non-interactive (like Pandora, not like Spotify) streaming service.

Allegedly Apple will pay royalties less than the statutory rate, and just half what Pandora pays. But to sweeten the deal, Apple will share ad revenue -- possibly as much as 35%-45% -- from a new class of audio ads (not simply the small iAds displays). And Apple is supposedly "proposing to the labels... a full-on, multinational sales force that would sell audio ads akin to what Pandora serves up for listeners to its free service." Apple also hopes to launch the service in the UK, France, Germany, Australia, and Japan (Pandora is legally available only in the U.S., Australia, and New Zealand).

Read more from CNet here.

RAIN ANALYSIS: We'd like to know much more about (a) features that will make Apple's service unique in the marketplace (the CNet article mentions features like "going back to the beginning of the song" and "making it easier to purchase music," which sound mildly interesting, but aren't really anything to hang a service's hat on; and (b) how the music will be "programmed" (i.e. human curation, internal iTunes data, third-party data). An automated, curated radio service based on iTunes data would be something genuinely new in the marketplace, which is currently dominated by only Pandora's Music Genome and services that use The Echo Nest. But would it be noticeably different from a user's perspective? -- MS

Paul Maloney
April 5, 2013 - 11:50pm

We hope you've planned to join us this Sunday for RAIN Summit West at the LVH Hotel in Las Vegas.

As you probably know, our Las Vegas Summit is our annual full-day Internet radio conference and a co-located education program of the NAB Show. Now in its 12th year, it's the premiere learning and networking event for the industry focused on radio and the Internet.

This year RAIN Summits is very happy to have partnered with online radio tuning service and mobile listening app maker TuneIn to stream live audio from the event (using Backbone Networks technology). If you're not able to attend, you'll be able to listen to live audio of RAIN Summit panels, presentations, and keynote speeches during the event. TuneIn will also archive the audio for later listening. (We'll post the link to the live audio stream here on Sunday.)

One of the industry thought leaders joining us will be Targetspot CEO Eyal Goldwerger (pictured left), to give a "POV" (point of view) address. TargetSpot is the nation's largest digital audio ad network, with nearly 40 million unique listeners to its more than 85 radio group and pureplay affiliates, nearly two-thirds of the online listening population. TargetSpot recently added six new partners to its network, including Songza and Radionomy (see RAIN here). Goldwerger is a board member of Galil Software, and was CEO of XMPie, Inc., which Xerox purchased in 2006.

One topic which will undoubtedly be on many Summit-goers minds is Apple's nearly-certain entrance into the Net radio field. Today we hear Apple may be close to label deals affording them royalty rates at half what Pandora pays!

Our panel "The Song Plays On" is dedicated to the issue of webcasting royalties, and ways services and the industry might work together better. We're very happy to welcome to the panel and to RAIN Summit composer, arranger, and performer Patrick Laird (pictured right), cellist and founder of the group Break of Reality. Last fall when multi-platinum artists signed on to an "open letter" ad critical of webcaster Pandora's efforts for royalty reform, Laird took his own stand and wrote an op-ed for The Hill in strong support of our medium.

He wrote: "It is clear that the effectiveness of internet radio with regard to both product sales and promotional power is overwhelming, and the success and expansion of these companies are of the utmost importance for the future of our group. Internet radio creates an unparalleled opportunity for us to reach millions of people who otherwise might not discover music like ours" (see our coverage here). Laird's an Eastman School of Music graduate with a Performer's Certificate. (Listen for Break of Reality music during breaks at the Summit!)

Broadcast Music, Inc. (BMI) is one of three "performance rights organizations" in this country that collects license fees from businesses that use musical compositions, and distributes royalties to songwriters, composers, and music publishers. David Levin (left) was named BMI VP/New Media & Strategic Development in October, and he leads digital revenues efforts for BMI. Prior to his current position, Levin spent 12 years at Sony Music Entertainment, where he rose to SVP/Digital Sales. He was also VP/New Media and Senior Director/Online Marketing at Sony. He was Director of Marketing at GetMusic.com, a joint venture of Bertelsmann and Universal, and managed market research for BMG.

"The Song Plays On" will be moderated by attorney David Oxenford (more here), widely-regarded as one of the foremost experts on the matter of webcasting royalties. Our other panelists include Brad Prendergast of SoundExchange, Ted Cohen of TAG Strategic, and Rusty Hodge from Soma FM (more info on these three here).

Our RAIN Summit keynote speakers on Sunday will be RAB president and CEO Erica Farber (more in RAIN here) and Rhapsody International president Jon Irwin (more here). More information, including a complete agenda and list of speakers, is available on our RAIN Summit West page.

Paul Maloney
April 5, 2013 - 11:50pm

Techcrunch reports Indian music service Saavn will add functionality from Shazam -- which makes mobile apps to identify songs (and other media) by sampling audio -- as part of a new partnership.

Saavn offers an ad-supported digital music service for fans of Bollywood and South Asian music, "targeting the vast numbers of data-enabled phones in India and South Asia that lack the ability to run smartphone apps." It calls itself the "Spotify of India" (where most western-based digital music services aren't available). Saavn last year added an English language version of the service.

Paramdeep Singh, Saavn executive chairman and one of its founders, will join us on the "International Trends in Online Audio" panel at RAIN Summit West Sunday in Las Vegas (more here).

Read more on the Saavn/Shazam partnership in Techcrunch here.

Paul Maloney
April 5, 2013 - 11:50pm

After less than two years, Blackberry is throwing in the towel on its BBM Music streaming service, and is steering customers to Rdio.

The service will end June 2nd. BBM Music was a $4.99/month on-demand streaming service that allowed customers to share up to 50 songs with other BBM users. It launched in August 2011.

Read more from The Verge here.