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

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Issue Date: 
Jun 7 2013 - 10:50am

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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.

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