Apple planning online radio service in 2013

It has been mentioned before as a 'possible', but the latest report about Apple's plan for an online radio service now make it sound more like a 'probable'.

That report comes from Bloomberg, which claims Apple has 'intensified' discussions with labels ahead of a launch of its streaming music offering, likely to be a rival to Pandora in the US and possibly a rival to Spotify more widely. It is Apple and the service is likely to be free in some respects. It is almost certain to be huge.

Apple isn't just doing this for benevolent reasons though. This is very much driven by profit margins. Sales of music downloads are said to be slowing, which means both Apple and the labels are looking at new ways of generating revenue.

With that in mind, the service is likely to be ad-supported via iAds and will probably use new ways of selling music. Selling tracks as music streams is one thing mentioned, as is the option to generate playlists from music you've already listened to. Not unlike the Pandora service in the US in some respects. In fact, the latest reports have already hit Pandora's shares hard. No surprise there.

Apple has already held discussions with the likes of Vivendi, Universal, Warner and Sony about its plans and is pushing for a conclusion to negotiations by the middle of November. If that happens, Apple will develop an app tailored for the iPhone, iPad and iPod Touch for its new service, rather than being based in a web browser.

We should see that as we enter 2013. I say 'we', but that is almost certain to be the US initially. Pandora was blocked in the UK due to rights issues, something Apple will have to deal with too. We're hopeful of a UK launch, just not as quickly as early 2013.

Source: Bloomberg

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