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June 2, 2013 10:49 pm
Apple is looking more likely to launch its long-awaited music streaming service at its Worldwide Developers Conference, which begins on June 10, after agreeing terms with Warner Music’s recorded music and music publishing divisions for the service known as “iRadio”.
Warner, the third largest global music company, became the first music publisher to agree a deal for iRadio, people close to the negotiations said, after Apple agreed to pay its songwriters 10 per cent of advertising revenue, more than double the 4 per cent rate it currently earns from Pandora, the US-based internet radio service with more than 70m “active listeners”.
Apple and Warner declined to comment.
Sony ATV, the publishing market leader that negotiated a 5 per cent rate from Pandora, also hinted that it was close to a deal. It is understood to have indicated that it would also accept a 10 per cent rate for the length of its first contract with iRadio, but that it wants a higher rate in future to come closer to parity with recorded music companies.
A Sony ATV spokesman said the company was “optimistic [Apple] will accept our introductory rate”, but declined to comment further.
Sony Music has yet to sign a deal for iRadio, however, giving Apple a little over a week before its event to win over the world’s second largest recorded music group, whose artists include Daft Punk and Justin Timberlake.
Sony declined to comment.
Google launched its rival All Access streaming service last month, and any further delay to iRadio would be seen as an embarrassment for Eddy Cue, who oversees Apple’s iTunes store, App store and iBookstore and has negotiated many of its deals with music companies.
Universal Music was the first recorded music group to sign up to iRadio in May, after securing terms understood to include a one-off payment as well as a royalty of about 12.5 cents per 100 tracks streamed, a share of advertising revenue and a guaranteed minimum sum over the two- to three-year deal. Universal, which also declined to comment, is also thought to be close to agreeing an iRadio deal for its publishing division.
Warner’s agreement, struck after a co-ordinated negotiation with both its record labels and Warner-Chappell publishing division, suggests that Apple has been willing to improve the terms on offer in recent weeks.
Apple is said to have broader ambitions for iRadio than existing streaming radio services, including the ability to purchase a song from the iTunes download store after listening to it and software that predicts what tracks listeners will enjoy based on their existing iTunes collections.
The music industry is keen to preserve iTunes’ download business, which earned them an estimated $3.4bn last year.
Mr Cue is expected to appear in a court in New York this week for the US Department of Justice’s ebook pricing case against Apple, which starts on Monday morning. The DoJ sued Apple and five publishers, alleging that they conspired to increase ebook prices at the time Apple was preparing to launch its iBookstore in 2010. The publishers have settled with the DoJ and Apple has denied the DoJ’s allegations.
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