Apple Inc. (NASDAQ:AAPL) just might be getting a step closer to making an announcement about a huge new service opportunity. Can you imagine a service that is brand-new but potentially could serve as many as 500 million people on the first day? Yeah, we have kind of a hard time conceptualizing that too.
As we reported recently, Apple Inc. (NASDAQ:AAPL) has been working to sign on major music labels and their publishing arms to develop a new music-streaming service that would key off of iTunes and would be like Pandora, but only times seven or so. Recently we wrote about Apple reaching a deal with Warner Music and its publishing division, Warner/Chappell, as part of a potential iRadio service, but that Sony Music and its publisher Sony/ATV has been the final holdout among the big three.
The largest music label, Universal Music, was actually the first to sign on to this deal with Apple Inc. (NASDAQ:AAPL). Well apparently the deal With Warner and Warner/Chappell was the nudge needed, because Friday it was announced that Apple had reached an agreement with Sony Music for rights to its music. A separate deal with Sony/ATV is still in the works, but getting the labels on board is the first giant step toward launching the iRadio service. There was talk that the service would be unveiled at the Wordlwide Developers Conference (WWDC) that starts Monday, but until the Warner and Sony deals, that talk had become doubt. Now with these latest agreement, it seems that all systems are a go to learn about this new service.
Rumors about the service has welled up over the last few months, giving indications about how and in what ways Apple Inc. (NASDAQ:AAPL) iRadio would be different from a top competitor like Pandora Media Inc (NYSE:P). First of all, Pandora has about 70 million current paid subscribers; Apple has about 400 million customers tied to iTunes, and the iRadio service will supposedly be free and ad-supported. Pandora is currently offered in the U.S., Australia and New Zealand; iRadio would be expected to roll out to several more countries including the U.K., France, Germany and Japan.
So what about those publishers? Can Apple Inc. (NASDAQ:AAPL) get them on board?
The publishing houses for these music labels have been the sticking point, mainly because Apple Inc. (NASDAQ:AAPL) wants to go with the free, ad-supported version of music-streaming in contrast with Pandora Media Inc (NYSE:P). Warner Music's publishing arm signed on just last week, agreeing to about 10 percent of all ad revenue that Apple generates with the service, which is more than twice what Pandora offers and could be the amount that will get Universal's and Sony's publishers to agree to a deal. Sony's publishing chief was actually on the record as saying he was seeking a 10- to 15-percent cut in order to reach a deal.
What are your thoughts? Would you be interested in an Apple Inc. (NASDAQ:AAPL) iRadio service? Give us your thoughts about this in the comments section below.