6/7/13: With Sony Music in, all major labels now aboard for Apple webcasting service

Paul Maloney
June 7, 2013 - 10:50am

Apple and Sony Music have reportedly reached an agreement to license Sony-owned sound recordings for Apple's upcoming Internet radio service. Sony Music was the final major label holdout; Warner Music and Universal (including EMI) are already in.

"As of earlier this week, the company had yet to sign up Sony/ATV, Sony’s music publishing arm," All Things Digital Peter Kafka wrote today (here), meaning it's not yet full-steam ahead for what the press has called "iRadio."

"But the gaps between Sony/ATV and Apple were supposedly smaller than the ones Sony Music and Apple were looking at a few days ago."

It's expected that Apple will announce the service at its Worldwide Developers Conference on Monday, and make the service public later this year. As an Internet radio service, it's most obvious competitor out of the gate would be webcasting giant Pandora.

Paul Resnikoff at Digital Music News points out (here): "So, kill Pandora, kill? Not exactly: just recently, Pandora CEO Joe Kennedy noted that Pandora's extremely-huge audience makes it nearly-impossible for Apple to boot the app off its iOS deck. Then again, that's what they said about YouTube."

The new Apple service will compete with Pandora not only for listeners, but for advertisers as well. Earlier this week we reported (here) that Apple was retooling its underperforming iAds program to support the webcasting service. AdAge says (here) using the iAd service for the Net radio product will allow Apple "to retain a higher percentage of that ad revenue compared with other iAd inventory. Currently, 70% of iAd revenue is given to publishers who monetize their apps using the service, according to Apple's iOS developer program." According to sources, Apple's deal with music rights holders calls for the company to turn over 10% of ad revenues.

AdAge also reported Apple's service will allow advertisers more accurate consumer targeting than would-be rival Pandora. Pandora steers appropriate ads to listeners based on age, gender, and area code (as supplied by listener). "If a Pandora user changes his or her permanent residence and fails to update their zip code in his or her Pandora account, the ability to target ads based upon location is nullified," AdAge wrote. "Using iRadio on an iPhone will give iAd the ability to more precisely target ads to users based on location." And better targeting can command higher advertising rates.

Paul Maloney
June 7, 2013 - 10:50am

SoundExchange, the recording industry body that administers royalties for digital uses of copyright sound recording (like webcasting and satellite radio) has reportedly begun auditing broadcast groups Cumulus Media and Saga Communications.

Broadcasters aren't mandated to pay royalties for their "on-air" use of sound recordings, but do become SoundExchange customers when they stream.

Inside Radio reports SoundExchange is "policing station logs to ensure broadcasters are paying what they should in streaming royalties," and that Beasley and Greater Media have already been under SoundExchange's microscope. SoundExchange will need to pay for the audits unless they find a licensee underpaying by 10% or more.

Industry groups that administer composition and publishing rights, ASCAP, BMI, and Sesac, conduct similar audits.

Inside Radio says SoundExchange is using an outside firm to conduct the audits. Read more here.

Paul Maloney
June 7, 2013 - 10:50am

Leading webcaster Pandora streamed 1.35 billion hours of content in May, which is 22% higher than May 2012 (1.1 billion hours) and up a bit from the 1.31 billion hours it streamed in April of this year. However, that's still down from the 1.5 billion hours Pandora streamed in March, before it capped free mobile listening at 40 hours/month as a cost-reduction measure.

Pandora says as of May's end, it had 70.8 million "active listeners," a 33% increase from its 53.3 million in May 2012, and a slight uptick from April 2013's 70.1 million. The webcaster says its share of total U.S. radio listening in May 2013 was 7.29%, down slightly from the previous month's reported 7.33%, but a healthy increase from the 5.80% it reported in May of last year.

RAIN reported Pandora's April listening figures here. Pandora's press release with May's numbers is here.