AdAge says better targeting of iAds on Apple net radio service will make them more lucrative

Friday, 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.

Apple's iRadio to reportedly pay Warner Music a royalty rate the same, or higher, than Pandora

Monday, June 3, 2013 - 11:40am

Apple has reportedly taken a step closer to launching its online radio service, by securing licenses from both label group Warner Music and music publisher Warner Chappell. Some observers are still looking for a launch at WWDC (Worldwide Developers Conference), which begins June 10. Earlier reports had indicated that Apple already had a deal with WMG (see RAIN here).

CNet's Paul Sloan writes today, "The deals reached so far offer far better economics for the music labels and publishers than what they get from Pandora, the product that most closely resembles iRadio."

CNet's sources say Apple -- which had been rumored to be getting a discount -- will pay labels and performers the same per-stream rate as Pandora (currently either $.00120 per song per listener or 25% of gross revenue, whichever is higher; more here). Interestingly, Billboard writes, "The agreement with Warner calls for Apple to compensate the company at higher rates than what is currently paid by most Internet radio services such as Pandora... around 0.16 cents ($.00160), similar to the rate Universal Music Group received."

The new service will net publishers "more than twice the ad share revenue they currently receive from Pandora," says CNet. The New York Times writes, "Publishers... paid about 4% of Pandora’s revenue... want as much as 10% from Apple."

Apple apparently will also share ad revenue with labels, and promises a more seemless way to purchase music via iTunes.

Notably, Apple will supposedly be allowed to enable listeners to "rewind" songs (prohibited by the DMCA's statutory license and all current SoundExchange licenses with various classes of webcasters -- see RAIN's royalty round-up here).

Among major labels and publishers, Apple still needs to secure deals with Universal's music publishing arm (the company already has an agreement with Universal Music Group) and both Sony Music and Sony/ATV (publishing) (more in RAIN here).

Read more in CNet here, The New York Times here,  and in Billboard here.

Sony music publishers reportedly want royalties "on par" with labels for Apple Net radio

Tuesday, May 28, 2013 - 11:55am

Some follow-up on our coverage from last week on slow-moving negotiations over iRadio between Apple and both Sony's record label and publishing (in RAIN here): Sony/ATV head Martin Bandier wants the songwriters and publishers he represents to collect royalties "on par with those of performers," the New York Post reports.

"Performers" here is likely PR-speak for "record labels," as both are paid on sound recording copyrights. While labels' share of streaming royalties dwarfs that collected by publisher/songwriter groups, music performers have complained vigorously about low pay for streaming play.

Apple reportedly hoped to launch its heralded "iRadio" Internet radio service by June, and sources said licensing deals with the two other major label groups (Warner and Universal) as well as performance rights organizations ASCAP and BMI (for most publishing) were in the bag. Now, apparently, the Sony Music label group and publishing group Sony/ATV are holding out (Sony/ATV withdrew its digital licensing from ASCAP at the beginning of the year, requiring services like Pandora to secure rights to their compositions directly, see RAIN here).

"Sony/ATV currently gets a 5% royalty but is pushing for a rate closer to 55% — what recorded music labels get," the Post wrote about the negotiations with Apple. "A source said that Bandier doesn’t feel he’s standing in the way of the launch — and that he would even accept a rate of 10% to 15% as a first step toward his goal of parity." Publishing group BMG Rights Management is reportedly also holding out for better terms now.

Besides simply seeing the high royalties labels are commanding, news source The Verge suggests consumers' changing music consumption is forcing publishers to demand more.

"Music publishers represent songwriters and composers, who make a big chunk of their royalties from CD and download sales. But those formats are in decline, disc sales have been plunging for a decade, and the growth in downloads has slowed to a trickle... publishers... don't make as much from streaming music."

The prolonged negotiations are also frustrating the other players who've already settled, according to the Post.

"There’s a frustration... [The Apple streaming service] is a net positive for the business. Apple is offering a 50/50 ad revenue share, minimum guarantees and royalties and the most successful ecosystem that’s ever been created. Unlike Pandora, the up-sell opportunity is enormous," an executive told the paper.

Read the New York Post here. Read The Verge here.

Apple's "iRadio" stalled yet again on royalties

Friday, May 10, 2013 - 12:45pm

The Financial Times reports that Apple's development of its "iRadio" streaming service are caught up by rights negotiations yet again, this time with Sony Music.

Apple reportedly has reached and agreement with Universal Music, and is close to a deal with Warner Music, leaving only Sony among the "big three" label groups.

Though Apple won't verify any details, or that they're even developing such a product, the Financial Times reports:

"These people said that Apple had first offered a royalty of about 6 cents for every 100 tracks it streams, but had raised this to about 12.5 cents, in line with the rate paid by internet-radio service Pandora. But it was unclear whether Universal had accepted the 12.5 cent rate, and other labels are thought to be pushing for better terms."

The paper's sources also suggest Apple has offered to pay for music rights on a per-track royalty, an ad revenue share, and a guaranteed minimum. Read the Financial Times' coverage here.

Sony's streaming music service gets 60-day free trial, new pricing tier

Thursday, August 30, 2012 - 12:05pm

Sony Music UnlimitedSony has announced a new 60-day free trial for its Music Unlimited service. The streaming music offering includes not only on-demand options, but "ad-free Pandora-like radio streaming," with both genre- and artist-based stations (RAIN coverage here and here).

Music Unlimited also gained a new monthly pricing tier: €4.99 (a little over $6) a month gets users unlimited streaming. Engadget has more info here.

Sony, Logitech, Netgear and (perhaps) Apple intro new wireless music streaming offerings

Wednesday, August 29, 2012 - 11:25am

New speakers and devices to stream web radioLong gone are the days when your Internet radio listening experience was limited to your computer speakers. There's now a wild, wide world of speakers and devices to stream web radio (see our story below for a new review of one popular choice). That world expanded today with the introduction of several new devices (and one new rumor from Apple). 

Logitech has launched several new devices including the new UE Smart Radio, "the next generation" of Logitech's Squeezebox web radio players. The tabletop radio can stream Pandora, Spotify, Rhapsody and thousands of web radio stations.

Also from Logitech: the UE Boombox -- an impressive and "booming" wireless Bluetooth speaker -- and its little brother, the UE Mobile Boombox. Both are capable of playing music from any Bluetooth-enabled device (including your web radio-streaming smartphone). CNet has more coverage here.

On the topic of wireless speakers, be sure to check out the SRS-BTM8 offering from Sony. The distinctive device boasts Bluetooth and NFC connectivity ("an addition that lets you play music simply by tapping the speaker with your smartphone," writes Engadget). It's powered by four AA batteries (remember those?) "that promise 20 hours of playback time." Engadget has more here.

That's all well and good, but what you if happen to already own some decent speakers, perhaps as part of a home entertainment system? Netgear has you in mind. The company launched what it call the Powerline Music Extender, which boils down to streaming your music around the house using your electrical outlets.

You may have seen devices that share your network around the house via your outlets, but now Netgear offers a device (XSUB2511) that lets you stream music too. The device connects to any audio device via RCA jacks, reports SlashGear here and PC World here. Netgear's sytem supports both Apple and Android devices, even integrating with Apple's AirPlay system for iOS gadgets.

Speaking of AirPlay (click here for a refresher on what AirPlay is), The Telegraph reports Apple's wireless music/video sharing service may be getting an upgrade soon. AirPlay currently relies on your Wi-Fi network to stream audio (like Internet radio streams) and video around the house. But on September 12, Apple may announce "AirPlay Direct," an upgrade that would allow AirPlay devices to connect directly to each other, without the need of a Wi-Fi network. (Apple may also announce an update to some phone it makes that day, too). Find The Telegraph's coverage here.

So what do you think? Any of these gadgets sound appealing? Have a better suggestion? Let us know by leaving a comment!

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