Apple Reportedly Launching Pandora Challenger In 2013
October 26, 2012
Rumors have been swirling for some time that Apple would launch its own streaming digital music service as a competitor to Pandora. A new report from Bloomberg late Thursday says that Apple has "intensified" its talks with the major labels and hopes to launch the service in early 2013. The Bloomberg article was powerful enough to affect Pandora's stock price, which fell by 12 percent at the end of Thursday. Pandora's stock price actually rose earlier this week after Apple introduced its new iPad Mini and other new computers, yet made no mention of a radio service.
Sources tell Bloomberg the service would be ad-supported and the current negotiations center around how to share the advertising revenue. In addition to an upfront fee, the labels are reportedly seeking a percentage of ad sales and the ability to insert their own commercials for artists. Apple sees the service as a way to grow its iAd mobile advertising platform, and would like to integrate iAd with iTunes.
A deal between Apple and the labels could close by mid-November, with the service launching in the first quarter of 2013. Apple's licensing deals would also allow for more flexibility in terms of listener control over the service, as opposed to Pandora's system. Apple is also reportedly asking for earlier access to new releases.
Bloomberg's sources say that Universal Music Group, Warner Music Group and Sony Music executives all visited Apple's headquarters in California in recent weeks to discuss its streaming service plans. Apple wants its users to have the ability to buy tracks as music streams or revisit songs via auto-generated playlists. The company also would like to create a specific app for the iPhone, iPad and iPod Touch, but are not focusing on delivering music through a Web browser.