CNET News announced on Friday that Apple is preparing to sign a new deal with iRadio to offer streaming services to its users. This arrangement could help music listeners by delivering smaller per-stream rates, as well as record labels by offering them additional sources of income.
Pandora used to be the main provider of online radio services for Apple users, but the company announced on Friday that the situation could change in the following week. According to the company’s spokespersons, the iPhone maker is due to sign a new deal with iRadio to offer streaming services to its users at better rates. Analysts believe the other streaming service, Pandora, will suffer great losses as a result of this agreement.
iRadio is not as popular as Pandora, but it could become largely spread due to its affordable prices and benefits they offer to customers and record labels. The plan that Apple has in mind is supposed to use the iTunes user base to obtain revenue for the recording companies. This plan will be achieved through two main steps. First of all, listeners will have an easier download method at their disposition, so sales will grow considerably. On the other hand, record labels won’t have to pay so much money as Apple will introduce voice ads that will make up the price difference.
Sources claim the provisions of the contract are not very clear, so the deal may not be signed next week as Apple initially stated. Nothing else has been specified about Apple’s agreement with iRadio, besides the payment method, so experts are reluctant in accepting the news. Recording labels, on the other hand, think the per-play rate is the only aspect that is concrete from Apple’s announcement, which is why they will wait for the iRadio service to be launched before switching from Pandora.