Every year Apple releases a new product, regardless if we consumers want or need another technology device. Yet, we still find a way to purchase the iPad mini, mini 2.0 or iPhone 35. But, with all seriousness, I realized I can count on one hand all the people I know that do not own an Apple product who are under the age of 55. No doubt, Apple has been successful at marketing their products to make us believe they are the best in the market for cell phones, computers, etc. So, it was only a matter of time before they emerged into the streaming radio industry.
Several sources are reporting that Apple has been in talks with major music labels to start an advertising streaming radio service. What does that mean for Pandora? Just that they will be added to the list of several other Apple competitors. The service, rumored to start in early 2013, will supposedly offer alternative options that currently frustrate Pandora users.
I would personally like more flexibility when it comes to what I hear on Pandora. Apple has recognized this complaint, seeking licensing pacts with labels that will allow them to have an advantage over Pandora. Currently, Pandora has a compulsory license that limits how often users can skip tracks and how many times an hour an artist can be played.
However, unlike Pandora, Apple is not focused on delivering music through a web browser, but is looking to create an app tailored for its products such as the iPhone and iPad. Either way, this is great news for the advertising and music industry.
Apple’s negotiations with record labels have been centered on advertising. Record companies are seeking a percentage of ad sales in addition to an upfront fee and the ability to place commercials promoting their artists. Apple sees this service as a way to grow its iAd mobile advertising platform, and is exploring ways to integrate iAd with iTunes to steer customers back to iTunes. This is surely music to record labels’ ears, since music downloads sales are slowly declining. With Apple also pushing for earlier access to new releases, Pandora’s R&D team needed to get to work yesterday to figure out a way to continue as the market leader in streaming music.
As for advertisers, get those budgets ready! Because these days, everything Apple creates turns to GOLD!