itunes radio

Apple has sent invitations for the rumored September 10 press event (so it's now official) to introduce the latest iPhone. TechCrunch believes that since the new mobile operating system, iOS 7, is due to arrive around September 20 or so, Apple will likely include more details about iTunes Radio as well.

We reported in August that that the iTunes Radio launch would happen in September, along with several large advertising campaigns purchased by Pepsi, Nissan, and other blue-chip advertisers (see RAIN here. See more of our iTunes Radio coverage here).

Tuesday's event will take place at the Apple Campus in Cupertino. The invitations include the tagline "This should brighten everyone's day," along with a series of various colored dots under a white Apple logo. Apple is rumored to unveil  different color casings for the new phones, or at least a gold color, for what will possibly be called the iPhone 5S. A lower-cost phone, the iPhone 5C, is also likely.

Read more in TechCrunch here.

Given the high cost of operation and mounting losses of industry leader Pandora, analysts have suggested that Apple's intention with iTunes Radio isn't about profit -- (it may not even be about Internet radio at all).

"It’s about keeping its users from other Internet radio products," wrote Minyanville.com's Diane Bullock. "If Apple can provide this in-demand service to its iOS faithful, they won’t be tempted to stray and find themselves in the open and exciting arms of threateningly hip startups. Being all things digital means the cult of Mac won’t have to worry about defectors bolting for the door."

Consider: most potential listeners already have an iTunes account. The new service will be preinstalled on iPhones and iPads with iOS 7, iTunes for OS X and Windows, and Apple TV. And if a listener is signed in and ready-to-go, why launch another app to listen to Net radio? 

You may remember that the iTunes store itself had "break even" as a goal in 2003, and was launched to help sell iPods. After just five years, the store became the the leading U.S. music vendor. It now accounts for 64% of the world's online music sales, generating 15% profit on sales of $13.5 billion.

For the Internet radio product, Apple may have already laid the groundwork for some nice revenue. With blue-chip advertisers lined up before the service even launches, some paying tens of millions for year-long ad campaigns (see RAIN here), Apple may indeed end up exceeding expectations. They've done it before.

Read the Minyanville piece here.

AdAge reported late yesterday that Apple's iTunes Radio webcast service will launch to the public next month, with a host of top-name advertisers to support it.

Several sources last week reported Apple will unveil its next iPhone at a special event on September 10, so it's possible the radio service will go live then (or shortly thereafter) as well.

Listeners who don't subscribe to iTunes Match can expect to hear ad campaigns from McDonald's, Nissan, Pepsi, Procter & Gamble, and more. (iTunes Match subscribers will get ad-free streams.) AdAge says some advertisers will also have curated streams with fewer ads.

The service will run audio and video interstitials (videos will run when the user interacts with the player), and "slate" ads, which AdAge says are "interactive display ads that will take over whatever screen the consumer is using." Audio ads will come every 15 minutes of listening, video ads once an hour (when the user interacts with the player).

RadioInk wrote in its reader e-mail: "Imagine you are about to launch a new format -- and advertisers were falling all over themselves to be a part of it. Dream on. For radio, it's typically the opposite. Prove people listen first, then we'll buy. That's because radio is not Apple. Without any history of success or understanding of whether consumers will accept the new product, it appears several major advertisers are ready to roll out with iTunes Radio when the new platform launches this fall."

Indeed, AdAge reports the launch deals fall between "the high single-digit millions of dollars to tens of millions of dollars and include a 12 month advertising campaign..."

Read AdAge's coverage here.

Pandora CFO Mike Herring told investors Wednesday he expects Apple's iTunes Radio debut to benefit, not hurt his company's audience... and, as CNet paraphraed, "accelerate the move to [digital radio] from traditional broadcast radio."

"When iHeartRadio launched a couple years ago, we had the same questions," Herring told the Canaccord Genuity Growth Conference. "We've gone from 50% market share to 70% market share, and they've stayed flat... We won't do much different."

CNet does point out, however, that Apple has a huge advantage over Pandora when it comes to global reach. Apple's direct licensing deals with labels and publishers "generally give it rights to the countries where iTunes operates, numbering above 100." Pandora currently operates only in the U.S., Australia, and New Zealand.

Read more in CNet here.

Apple today released a new iTunes beta of version 11.1 on its developer site, including for the first time iTunes Radio for the OS X desktop. (ITunes Radio made its first public beta appearances in initial beta versions of iOS 7 and iOS for the Apple TV.)

The tech giant announced in June (RAIN coverage here) the pending official release of iTunes Radio, a free (or ad-free, for iTunes Match customers) customizable streaming online radio service. As the name suggests, iTunes Radio will be integrated into iTunes and feature over 200 curated channels, plus algorithmically-generated channels based on listeners' favorites songs, artists, and more. All the stations can be fine-tuned by the listeners, and the company says the service will "evolve" based on listening and downloading habits.

Techcrunch reports today: "On the desktop, iTunes Radio looks to operate pretty much the same as it does on mobile, providing access to some pre-set stations and letting users create their own. The interface is remarkably minimal for now, but Apple has left lots of room for custom stations. There's also a button to let you buy songs being played back instantly in the 'Now Playing' window, as you can see in the screenshot below provided by an anonymous tipster." [That's the photo below.]

Read more in Techcrunch here, and in CNet here.

Nielsen reported last week U.S. music download sales for the first six months of this year are off slightly (2.3%) from what they were at the same point last year. However, streaming music volume is up 24% over the same period, however. (Nielsen's report summary is here.)

Sources like GigaOm say this data indicates a trend, and is exactly why Apple is launching iTunes Radio.

"Attitudes toward music ownership have shifted drastically over the last few years. And (the Nielsen report)... makes it very clear why Apple, which upended the music business a decade ago with its iTunes Music Store, had to start its own streaming music service," wrote GigaOm.

Interestingly, it was GigaOm itself, in an earlier analysis, that suggested Apple's move may be more than just jumping on the streaming bandwagon. We reported in April (here) on GigaOm's suggestion that Apple's iTunes Radio launch isn't necessarily designed to compete with Pandora, but to bolster its music sales business.

Author Janko Roettgers wrote in the earlier GigaOm piece, "The goal is not to kill Pandora, but to actually bring that type of radio service to more users, and keep them from switching to a full-blown access model," like Spotify.

This seems to be what Wall St. Cheat Sheet sees as well. Apple's "market dominance bodes well for the success of iTunes Radio since Apple has created a strong link between its music streaming service and the iTunes Store," it wrote.

Read GigaOm here, and Wall St. Cheat Sheet here.