Apple Rumors: New 'iRadio' Could Give Competitors a Run for Their Money

Apple might expand its music services from iTunes to iRadio. (Image: Apple)

In a longer-form piece about the future of the music industry as it pertains to streaming services, the Verge reported there will most likely be a new contender joining Pandora, Spotify and others as in the online music market: Apple.

"iRadio is coming. There's no doubt about it anymore," the Verge reported a source saying.

Those speaking with the Verge familiar with the supposed plans for iRadio said the company is talking with Universal and Warner labels for a launch that could come as soon as this summer.

It is this other option for music streaming coming on the scene that the Verge says is why the music industry isn't keen about lowering rates for providers like Pandora. Pandora believes its rate -- 12 cents per 100 song streams -- is too high for it to make a profit:

Last year, the web's top radio service tried getting the Internet Radio Fairness Act (IRFA) passed. The bill went nowhere, but Pandora, which is looking for a new CEO, is expected to take another run at Congress. Any reduction in the royalty rate cuts directly into the music labels profits. They helped derail IRFA and will continue to fight.

Battling Pandora will be tricky for the music sector. Multiple music industry insiders have told The Verge that the labels consider Pandora a capable and communicative partner. Then there's the money. According to the RIAA report and statements made by SoundExchange, the group that collects royalties from web radio services, Pandora contributes about 25 percent of all the money the labels receive from the access models. (Incidentally, SoundExchange's revenue was up 58 percent last year.)

The Verge calls this "biting the hand that feeds you" because streaming services are increasingly how the music industry itself is generating revenue.

"Access models," as the streaming sites are called, are considered the "present" and "future" of the music industry, according to RIAA CEO Cary Sherman. Which is why Sherman told the Verge it's important to "protect these increasingly important revenue streams."

The Verge goes on to report though that if Apple's iRadio comes on the scene and receives a better rate than Pandora, for example, it believes Pandora will make another appeal to Congress for Web radio to be treated fairly.

Last month, the New York Post reported that Apple was seeking a rate of only 6 cents per 100 songs streamed -- that's half of what Pandora has to pay. Spotify pays 35 cents per 100 songs streamed.

Of the iRadio rumors, the Post reported sources saying Apple might combine the streaming service's launch with iMatch, a function that makes music available on all of a users iOS devices.

(H/T: SlashGear)