Is Apple Planning a Streaming Service?
Apple has gotten the attention of
radio broadcasters since reports — broken by the Wall Street Journal on
Thursday night — indicated that the company is looking into building “a custom radio
service similar to the popular one operated by Pandora Media.”
Though putatively aimed at online music services, an Apple
push into the field could increase pressure on broadcast radio outlets
already getting plenty from online music streamers.
While online services like Spotify and Clear
Channel’s iHeartRadio compete with Pandora, the WSJ speculated
that “Apple’s outsize presence in online music sales and massive installed base
of MP3 players, smartphones, tablets and computers could make it a much more
serious threat to Pandora than any of its current would-be rivals.”
Through midday Friday, Pandora’s market share price sank 18 percent,
according to multiple reports.
The WSJ added another bit
of gloom for established services; purportedly Apple is looking to
engage in direct talks with record labels, which could give the company a major
advantage over Pandora, which does not negotiate with record labels but instead
pays “sky-high royalty costs … based on rates set by an arm of the federal
The New York Times wrote that Apple is
interested in direct licenses because it “would give the company
more flexibility in using music.” This would alleviate the standard royalty
questions that have dogged Pandora and others, wherein a significant portion of
revenues is devoted to royalties. It would also avoid restrictions placed on
most online radio services that limit the number of times a particular artist
can be played per hour.
Hot off its copyright win over
Samsung, Apple is poised to reveal a new iPhone next week, Sept. 12. However,
about this particular pursuit, the company has thus far declined comment to
both the NYT and WSJ. In fact, the NYT reported their story using sources who
asked not to be named.