RAIN 9/7: And it's on! Apple to enter Internet radio field

Paul Maloney
September 7, 2012 - 1:05pm

"In a move that could shake up the growing field of Internet radio," writes The New York Times, "Apple plans to develop a service that would compete with Pandora Media by sending streams of music customized to users’ tastes," news broke late yesterday.

The Wall Street Journal wrote, "Such services create virtual 'stations' that play music similar to a song or artist of the user's choosing, either on Web browsers or smartphone apps. Like traditional radio, they are typically free for users, but incorporate advertisements."

Interestingly, Apple is reportedly negotiating with major labels regarding the service. Webcasters wanting to operate a non-interactive service don't need label agreements to stream -- as long as they adhere to DMCA rules (and pay royalties at the established rates), there's a statutory license available to them.

The fact that Apple is looking to forge deals with the labels indicates (and some sources have confirmed) they want to operate on terms other than the statutory -- in regards to the rates they pay, or the level of user-interactivity (on-demand song play, offline play, downloading, etc.), or content presentation (the DMCA limits the amount of music by a single artist a webcaster can stream in a given time frame, for instance).

Sources say the Apple service would likely be free to the user, and ad-supported. The service would like come preinstalled as an app on devices like iPhones and iPads, and might be able to connect to users’ iTunes accounts to collect usage info and better understand their tastes (both huge competitive advantages for Apple over services like Pandora). The service, reportedly, will not work on the Google Android mobile platform.

"Going head-to-head with Pandora pits Apple against one of the only other companies to gain real consumer traction in online music," writes The Journal. "According to a recent consumer survey by Nielsen Co., more adults said they use Pandora to listen to music than Apple's iTunes."

Read more from The New York Times here and The Wall Street Journal here, and look for more on this in RAIN.

Paul Maloney
September 7, 2012 - 1:05pm

"Apple would need to build its Internet radio service sooner or later," suggests Billboard.biz. Given Pandora's explosion in usage and strides in generating advertising revenue, on-demand services like Spotify have been stepping up their non-interactive radio features -- so perhaps it's time for Apple to do the same. Watch to see how Google, Amazon, Microsoft, and Facebook respond.

Billboard also suggests that direct deals between Apple and sound recording copyright owners (i.e. record labels) would allow Apple's service to stream anywhere around the world (the DMCA statutory license, which makes it unnecessary for webcasters to license directly from labels, applies only to the U.S.). This would be an obvious advantage over Pandora.

What's more, Apple obviously already has its iAd advertising platform, and a huge hardware customer base and the biggest download store in the world. They're uniquely positioned to leverage those tools to gain dominance in the Internet radio field.

"No Apple foray into music is a slum dunk. But given the company's track record in music and its commanding market position in mobile handsets and technology, Apple could become a major player - it could even dominate or reinvent Internet radio," writes Billboard.

Would Apple acquire an existing webcaster? "No acquisitions have been made public - Apple's purchase of SoundJam in 2000 preceded iTunes, and its purchase of Lala.com in 2009 preceded iTunes Match - so don't expect Apple to build from scratch any time soon."

Read more from Billboard.biz here.

Paul Maloney
September 7, 2012 - 1:05pm

Radio Loyalty is the company that developed the platform for webcasters to award "loyalty points" (redeemable for merchandise) to listeners. They've just been acquired by Lux Digital Pictures, Inc., which operates a digital streaming and online marketing service network. According to a press release (here) announcing the acquisition, "In May 2012, RadioLoyalty's Internet radio advertising network was ranked #1 by comScore in the 'Entertainment-Radio' category, with a potential reach of 68.5 million unique visitors in the United States." Try the Radio Loyalty platform here and read more about the service in RAIN here.

Meanwhile, WideOrbit, which makes ad-management software for media companies has acquired OneDomain, a software firm the makes media planning, research, and business intelligence software for radio and TV stations and ad agencies. "OneDomain has installed more than 600 television and radio stations with MediaOffice, its core Advertising Sales and Proposal system," explains the press release (here).