The Wall Street Journal has reported that Apple is looking at building a lie streaming music service similar to Pandora. Apple has been successful at dealing with the Music Recording industry before when it launched its popular iTunes service. At the time many labels were not very happy with what Apple was trying to do but with declining record label revenues the industry is ready to talk about ways to generate more sales from their property.
Some observers believe that the current talks by Apple will not be fruitful and will end up like Apple TV. The California based firm has been trying for several years to come up with an agreement with TV content producers to license content that could then be transmitted through the companies Apple TV. However, these negotiations do not seem to be going anywhere and any revolution that Apple has thought up for TV will need to wait.
Some industry observers, like Peter Kafka of All Things D, are optimistic about a deal because it will be easier to do than TV. According to Kafka, Apple is looking to get licensing that would be different from the ones that Pandora employs. The maker of the iPhone maybe looking at getting permission to play a single song more than once and avoid the costs Pandora pays by paying for a song every time it is played.
Some people have questioned the reason of Apple’s need to enter the Internet Radio market. They point at the fact that Pandora barely makes a profit and they dominate the sector. Kafka believes that Apple’s desire stems from two things. The first being that the company things it can leverage its iAds service to generate more revenue than Pandora from advertisements. Secondly the company may want a presence in the sector because the benefits to its other business units may outweigh the cost.
Kafka argues that if Apple is able to offer a Pandora like service they can keep people using their smartphones and tablets without moving on to other companies like Google or Amazon. Apple has always focused on its hardware and all other services in its ecosystem are meant to support hardware sales. A “iRadio” may not be big hit but it could keep users engaged long enough to keep them interested in Apple.
Source: All things D
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