Apple To Launch iRadio This Summer

Pandora and Spotify have a lead in the streaming music business, but record industry sources are telling The Verge, Apple plans to launch “iRadio” a new streaming music service by this summer:

Earlier this month the New YorkPost reported that record executives were balking at Apple’s offer to pay just 6-cents per 100 songs streamed on the service. Pandora pays 12-cents per 100 songs. That price was set by the U.S. Congress. Spotify pays 35-cents per 100 songs, but Spotify is largely owned by music labels.

Music executives want Apple to pay the price per 100 spins set by the Copyright Royalty Board for broadcasters – about 21-cents. That’s what other services run by the radio industry pay, or close to it. iHeart Radio pays 22-cents.

Apple has been the leading player in selling songs for a long time. iTunes is seeing an erosion of new music buying as more and more music fans choose streaming over owning songs.

“Now multiple music industry insiders have told The Verge that significant progress has been made in the talks with two of the top labels: Universal and Warner. One of the sources said ‘iRadio is coming. There’s no doubt about it anymore.'”

Regardless of what Apple does or what Pandora, Spotify, and iHeart Radio are already doing, they all will be competing against an on demand music service that’s all about the video. A Neilson study found that YouTube is the way 64% of teens prefer to get their music. Because of the popularity of YouTube both with teens and the music industry, Goole is also working on a new streaming music service.

Last year, according to Social News Daily, 25% of digital revenue for the Warner Music Group came from YouTube.