The Pandora Killer Cometh: Apple's Music Streaming Service iRadio'May Finally Debut In Early 2013

 @redletterdave
on January 04 2013 11:44 AM

It's been rumored for quite some time that Apple intends to release its own radio streaming service comparable to Pandora, but after negotiations reportedly went stale at the end of last year, things were not looking good for a possible iRadio service.

However, according to BTIG analyst Richard Greenfield, the iRadio is back on.

"With consumer behavior increasingly shifting toward access to a music catalog from ownership of specific songs, Apple launches an iRadio service in 2013," Greenfield wrote in his top media predictions for 2013. "We expect iRadio to be incorporated into the iTunes iOS ap with personalized radio functionality akin to Pandora, integrated with iTunes to purchase music and other music-related content such as concert information/tickets/merchandise via Live Nation and Ticketmaster."

But even though deals between Apple and the major record companies reportedly stagnated in early December, Greenfield believes negotiations are still ongoing; the analyst says the parties are currently working out the contracts over song catalogues.

"We believe Apple is negotiating direct deals with music labels to offer a far more robust service than current digital radio services that rely on compulsory licenses. iRadio will not only be a global solution, but will introduce increased skips per hour and extended caching for offline playback. While a Spotify-like music subscription service will not be included in iRadio's launch, we believe it could come in future iterations."

Apple's Pandora killer was first reported in September by the Wall Street Journal, and later that same day, the New York Times, citing "people briefed on Apple's plans." Both reports offered similar descriptions of Apple's goals, noting how the music streaming service would likely come as an app that could communicate with a user's iTunes Store account, which would further bolster Apple's Genius software, which suggests music to try or purchase.

"Like Pandora, Apple's radio service would have advertising, carried through Apple's iAd platform," The New York Times wrote. "Whether Apple would then share part of the ad revenue with labels or pay them some other licensing fee was unclear. It was also unclear whether the service would be free or require a subscription. Pandora with ads is free, although its users can pay $36 per year for a service that eliminates the ads."

Back in October, sources close to the situation believed deals for the iRadio service would wrap up for an early 2013 launch; even though the trail reportedly went "cold" in December, if negotiations are back on as Greenfield says, the iRadio could launch within the next few months.

Steve Jobs can't be here to strike the deal, so Apple would likely rely on Eddy Cue, the company's "master negotiator," to handle the talks between his company and the major music groups, including Vivendi, Universal, Warner and Sony.

Apple will announce its fiscal earnings for the first quarter of 2013 on Jan. 23.

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