April 01, 2013, 11:09 AM —
Image credit: REUTERS/Mike Blake
The long and winding road that is the launch of Apple’s challenge to Pandora, dubbed iRadio for lack of an official name, may finally have an end in sight. That is, if you choose to believe the latest rumors swirling around. On Friday, The Verge reported that “multiple music insiders” have told them that “significant progress” has been made in negotiations between Apple and two big music labels, Universal and Warner, over licensing their music for a free, ad-supported streaming service. The Verge’s sources tell them that the plan is for a summer launch of iRadio.
This would jibe well with another rumor that went around last week, namely that the next incarnation of the iPhone, called the 5S, will launch this summer, along with a new version of iOS. No doubt Apple would love to announce an iRadio service along with new versions of the iPhone and iOS. So, we should all look forward to cranking up the latest from the Biebs on our new iPhones at the beach this summer, right?
Well, maybe. If you’ve been following the iRadio saga, we’ve been here before. Last fall, Apple and the labels had “intensified talks” about a music service which was expected to launch in early 2013. Of course, that didn’t happen and last month we found out why: Apple and at least one major label, Sony, were far apart on the proposed royalty rate that would be paid for such a service.
Don’t forget that Apple isn’t simply negotiating with the labels over a royalty rate. They’re also interested in bypassing the restrictions imposed by the Performance Complement of the Digital Millenium Copyright Act (DMCA) on what they can stream. If Apple were to do what Pandora does and stream music without direct license agreements, in addition to paying statutory royalty rates (which are eating up more than half of Pandora’s revenues), they also can’t do things like play more than four songs from the same artist in a three hour period, if more than 3 such songs are played consecutively.
These negotiations with the labels are clearly complex. Also, any deal that a player like Apple strikes could affect future negotiated and statutory royalty rates paid by other streamers. Traditional broadcasters, as well, will also potentially be impacted by any agreements between Apple and the labels. So, it’s not surprising that this has been a slow process.
Assuming the rumors about Apple being close to deals with Universal and Warner are true and that deals are struck soon, does that mean that iRadio is really going to happen this year? One would think so, though the question of Sony looms large. Would deals with Warner and Universal make it likely that a Sony deal also finally happens? If not, would Apple launch iRadio without Sony music, and its large stable of artists, which includes Justin Timberlake, Beyoncé and Bob Dylan? The answer, my friends, is blowin’ in the wind.
Sorry, couldn’t resist.
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