• Apple Defines iTunes Radio Terms for Record Labels

    According to a report, the deal Apple is looking to score with independent record labels for its upcoming iTunes Radio service has been revealed. Based on The Wall Street Journal, Apple sent out terms to independent record labels last week which detail per-play rates, royalties and ad revenue the Cupertino California company plans to mete out in return for content access.

    For the first year of iTunes Radio, Apple is willing to pay 13 cents each time a song is played, adding 15% of net advertising on top of that, dealt out proportionately to a label’s presence on the service. The publication went on to say that rates will be going up to 14 cents per play and 19% of ad revenue in the service’s second year. The offer is a bit more enticing than the 12 cents Pandora pays out per each song played. Apple is also said to be offering more than twice as much in royalties when compared to the Internet radio giant.

    Exemptions from the generous terms are royalties on select tracks that are already in a user’s iTunes library as well as “Heat Seeker” content which is to be selected by Apple for use in promotions. Songs that listeners skip within the first 20 seconds are also exempt, with a limit of two songs per hour, per user.

    The Wall Street Journal said the independent label terms are similar to those granted to major companies Universal Music Group, Warner Music Group and Sony Music Entertainment. The “Big Three” are expected to receive cash advances. People who claim to be familiar with the matter said Apple is using iTunes Radio to sell songs through the iTunes music store, as well as move mobile devices like the iPhone and iPod.

    Apple previously announced iTunes Radio at its Worldwide Developers Conference earlier in June, noting the ad-supported free service will launch this fall on iOS 7 compatible devices such as the Macs, Apple TV and Windows machines. The service is said to feature customizable stations much like Pandora but will have an added benefit of tapping into a user’s past purchased from iTunes for the purposes of personalization.

    Is iTunes Radio something you are excited for trying out?

    Source: The Wall Street Journal
    This article was originally published in forum thread: Apple Defines iTunes Radio Terms for Record Labels started by Akshay Masand View original post
    Comments 9 Comments
    1. holyshnikes's Avatar
      holyshnikes -
      Only 2 skips an hour? Lame.
    1. slickric's Avatar
      slickric -
      Quote Originally Posted by holyshnikes View Post
      Only 2 skips an hour? Lame.
      Be sure to knock back their offer when they bring it to your label....
    1. iOS Guru's Avatar
      iOS Guru -
      Quote Originally Posted by holyshnikes View Post
      Only 2 skips an hour? Lame.
      From someone on the iOS 7 beta, I can tell you that you get 6 skips. The 2 skips the article is talking about is the cut off for what they pay the record companies when someone skips a song before it has played for 20 seconds.
    1. REMED1AL's Avatar
      REMED1AL -
      I doubt the 2 skips per hour is for the user. To me, it reads that they can only write off 2 skips per hour per user without paying fees.

      I'm enjoying Slacker right now and dropped Pandora awhile ago. Maybe this will be smarter and actually give me music I want to hear and I won't have to skip as much... let's hope.
    1. bigboyz's Avatar
      bigboyz -
      ^^Yes, I too like to skip but that is not really the point of streaming. Looks like artist will be better compensated compared to Pandora. I like the setup of iRadio yet it is still missing something...
    1. Cokeman's Avatar
      Cokeman -
      I'll be using iTunes Radio. I already pay for match. One less account or apps to deal with. I buy all my music through iTunes anyway, just makes since for me to keep it simple.
    1. brandyn baker's Avatar
      brandyn baker -
      It's not 2 skips per hour for the user
    1. bigboyz's Avatar
      bigboyz -
      two skips then commercial for me. Move to a different genre and it resets.
    1. z3r01's Avatar
      z3r01 -
      i have had more then two skips...im a match owner so it doesnt give me ads...only thing im concerned is that they said that iradio would be available for itunes on Mavericks beta and i dont see it
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