Apple may be signing its first licensing deal with Universal Music Group (UMG) as soon as next week, according to several sources with knowledge of the matter, says The Verge. UMG and Apple are in the final stages of negotiations, and Warner Music is close behind, say those sources. All Apple needs now to complete the licensing for what the media has dubbed iRadio is an agreement with Sony Music Entertainment and other music publishers.
Apple is widely expected to launch a streaming music service later this year, perhaps this summer, with features similar to Pandora, assuming it can get all the licensing squared away for such a service.
While Apple is pushing hard for a summer 2013 release, it has also been reported that the technology giant has also been looking to pay less in royalties to the content owners, though how that will play out may be in the labels’ best interests, by helping push consumers toward new music and potential music sales via iTunes, and providing labels with a percentage of advertising.
While the terms of the deal have not been disclosed, there was a report last month that Apple’s initial offer was a lowball amount, around six cents per every 100 songs streamed. That’s about half of what Pandora currently pays. The current group of sources are saying that Apple will now pay rates similar to those that Pandora does, and with the number of iTunes users Apple has access to, it may surpass Pandora itself.
iTunes ruled the roost of digital music since 2008, but upstarts like Spotify, Rdio, and Pandora have quickly become consumer favorites, as streaming music takes up no drive space on mobile devices, and a low monthly fee allows those same customers to listen to any music they want, not just the songs they’ve purchased via a service like iTunes.
It’s a no-brainer to assume that Apple and the labels will come to some sort of consideration, fairly soon, over how such an internet streaming music service will work for all parties concerned. When the licensing gets worked out, and the specifics of it, is still only known to those in the negotiations.
- Via The Verge