July 10, 0009
Apple is rumored to be signing with Universal Music Group next week to license music
Gird your loins, Pandora. Apple’s iRadio may be inching closer to becoming a reality, according to rumors that the tech giant is expected to sign its first licensing agreement with Universal Music Group as early as next week. Along with Universal Music Group, Warner Music is also expected to sign with Apple, according to sources who spoke to The Verge.
Apple’s unofficially dubbed iRadio is expected to be similar to Pandora, with some slight differences, such as more on-demand features, which could make it competitive with not just Pandora, but Spotify and Rdio as well.
ITunes has been the top digital music store in the U.S. since 2008, with 25 billion songs purchased to date. But a streaming service would likely introduce listeners to new music, which would push more sales. And it’s possible that with flagging sales of iPhones and iPads, Apple is looking to beef up its content business.
Universal Music Group is the largest of the major record labels, accounting for 34% of all physical album sales and 31% of all digital album sales in 2012. Sony Music Entertainment, the second largest label, accounted for 32% of all physical album sales and 27% of digital album sales in 2012.
But talks with Sony haven’t progressed as far as those with Universal and Warner, according to The Verge.
Word of Apple’s new streaming music service first surfaced last September and is expected to debut later this year. The news came as a surprise to analysts, who didn’t see Apple jumping into a business that involves paying back a substantial portion of revenues to record labels in the form of royalties. There was some hint that Apple would be paying roughly half of what Pandora is currently paying to license music, but now it seems Apple will be paying more or less the same amount.
The news comes days after Pandora announced they’ve reached 200 million registered users. It took the company six years to reach 100 million users in 2011, and that number has doubled just two years later. The average Pandora user listens to 20 hours of streaming music each month. Mobile has played a huge role in Pandora’s growth as smartphone penetration now accounts for more than half of the mobile phone market. No doubt, Apple did the math and saw that they’ve already knocked down the mobile issue, so from there, it’s a clear shot to streaming music domination.
Pandora shares were down 1.73% to $13.63 as of this writing.
Apple has not responded to inquiries from VatorNews.
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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
Pandora. Using this musicological “DNA” and constant listener feedback
Pandora crafts personalized stations from the more than 800,000 songs that
have been analyzed since the project began in January 2000.
More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
been a significant factor in the growth and popularity of Pandora, starting
with the introduction of the Apple app store for the iPhone in the summer of
2008. Pandora instantly became one of the most top downloaded apps and
today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.
Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
introduced their Media Interface Plus device that works with the
free Pandora iPhone app to provide direct control of Pandora from in-dash
stereo controls. This was all great news for the millions of Pandora listeners
who had been plugging their smartphones into car dashboards to listen to
personalized stations while driving. More than 50 percent of radio listening
happens in the car, making it a crucial arena for Pandora.
Today tens of millions of people have a deeply personal connection with
Pandora based on the delight of personalized radio listening and discovery.
These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
music has a greater chance of being played than ever before; 2) advertisers,
who benefit from the multi-platform reach of Pandora, as well as its best
practices in targeting consumers for specific campaigns; 3) the music
industry, which has found in Pandora a highly effective distribution channel;
and 4) automobile and consumer electronics device manufacturers, who have
noted that incorporating Pandora into their product makes it more valuable
to consumers.
Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.
Timeline:
• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected
devices.
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