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Apple To Conquer Online Radio Business

Apple is in talks about licensing music rights to create a new service that is to compete directly with a personalized online radio Pandora.

The most important feature of the Internet radio service Pandora is the adaptation of broadcasting content to the tastes of a listener in real time, it means that the music for the user is selected in accordance with the preferences he or she showed them before.

Similar feature of music selection is provided by such online music services as Last.fm, Spotify AB and iHeartRadio. These services create a virtual “station”, which broadcasts the taste-matched music. Just like ordinary radio stations, such services are generally free, but have a lot of advertisements.

The service from Apple will work on only Apple’s devices like iPhone, iPad, iPod, a Mac, and, perhaps, on personal computers run by Windows. At the same time, the music service will not work on smartphones and tablets that use Android, a rival mobile platform from Google.

Apple has just begun negotiations with the owners, and even if they succeed, the launch of the service to the market can take months. The company intends to achieve some specific licensing terms, in particular, the absence of restrictions on the frequency of listening to a particular song, which can become a competitive advantage of its service.

The profit from the service will be received from advertising on the Apple’s platform – iAd. However, Apple representatives refused to comment on the planned service.

Apple is already a leading player on the online music market, developing online content store iTunes.

The company previously undertook a number of additional initiatives in this market – for example, it launched a social network with a musical bias Ping in 2010. Using this network, people can find friends and see what songs they’ve recently downloaded and listened to. However, the current plan is a more serious business venture of Apple than the previous ones in this field.

At the same time, service Pandora, an analogue of which may be developed by Apple, is unprofitable. In May-July 2012 the company reported a loss of $ 5.4 million on revenue of 101.3 million dollars. The main cause of loss Pandora is the high cost of royalties for the use of music. At the same time the service has been successful in sales of mobile advertising.

By the end of June, iTunes has reported more than 400 million of accounts. Pandora audience, at last count, has “only” about 55 million users.

Written By

This post is written by Katerina Merzlova, a Chief Marketing Officer from SumatoSoft, a software development company. We see the big picture, leverage the expertise and extensive experience to provide clients with end-to-end technological web, mobile, and IoT solutions.

10 Comments

10 Comments

  1. TracyAnn0312

    September 17, 2012 at 8:51 am

    I think that Apple will not be able to conquer online radio business. We all know that apple is one of the most successful company when it comes technology. We must just see whether they are able to conquer radio businesses.

  2. Michael Davis

    September 17, 2012 at 4:19 pm

    The move by Apple perplexed some analysts, who noted that the Internet radio business seemed too small — accounting for less than $1 billion a year in revenue, by some estimates — for Apple to bother with. Established players like Pandora also already distribute their services through apps on Apple’s devices.

  3. Nawaz

    September 17, 2012 at 4:38 pm

    Apple has to face tough time to be a conquer online radio but not very soon. In long run it is possible.

  4. Becca

    September 18, 2012 at 2:59 am

    Good luck to Apple! I agree ti will not soon, so many things to considered before it
    will make a success business deal.

  5. Katerina

    September 18, 2012 at 9:52 am

    Time will show, but I think not soon in Apple’s understanding it is just a year or two.

  6. Erica Williams

    September 19, 2012 at 10:14 am

    Well if they have decided to go for radio service they must have considered all the aspects and in my opinion they will be providing this service in near future. Lets wait and watch when they achieve their goal, form my side Best of Luck!

    • Katerina

      September 19, 2012 at 11:39 am

      Apple does nothing without making a research. It is a very ambitious company that should do everything perfect.

  7. Kenny

    September 21, 2012 at 5:54 am

    I presume Apple will probably sell advertising space. I can’t see how they will turn a profit otherwise, Apple could conquer online radio, as it is the ambitious company which shown a wonderful service in terms of technology.

  8. Kenny

    September 21, 2012 at 5:59 am

    I presume Apple will probably sell advertising space. I can’t see how they will turn a profit otherwise, Apple could conquer on line radio, as it is the ambitious company which shown a wonderful service in terms of technology.

  9. Katerina

    September 21, 2012 at 10:40 am

    Well, Apple will always find the ways to earn money. Just imagine the possible prices on such ads on the official Apple resource!

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