Report: Apple inks Sony to iRadio deal, WWDC reveal expected


Apple (NASDAQ:AAPL) has completed a streaming music licensing agreement with Sony Music Entertainment, setting the stage for the computing giant to formally announce its long-anticipated iRadio service during next week's Worldwide Developers Conference, AllThingsD reports.

Citing a source familiar with negotiations between the two companies, the report states Apple and Sony Music have resolved the issues keeping the label from agreeing to offer its digital catalog via iRadio, which is expected to offer streaming music services similar in scope to Internet radio provider Pandora. Apple previously completed iRadio agreements with major labels Universal Music Group and Warner Music as well as music publisher Warner/Chappell, but earlier reports indicated Sony was refusing to sign off on song skipping features integrated into the service, taking issue with how much Apple would pay record label partners for songs that listeners sample for a few seconds, then skip over. Apple and Sony were believed to butt heads over other iRadio features and stipulations as well.

AllThingsD adds that as of earlier this week, Apple has yet to reach an iRadio agreement with Sony/ATV, the label's publishing arm, but notes that the two sides are believed to be closer to settling their differences than Apple and Sony Music were a few days ago. Apple and Sony did not respond to requests for comment.

The New York Times recently reported that Apple ramped up negotiations in the last few weeks in an effort to wrap up all iRadio licensing deals ahead of WWDC, its marquee annual showcase, which kicks off June 10. Assuming all agreements are indeed locked down by that time, Apple is expected to finally confirm iRadio's existence and detail its key features and points of differentiation during the event, although the service is unlikely to go live until sometime after WWDC wraps.

Apple reportedly is offering record label and music publishing partners three tranches of iRadio revenue: Royalties per track streamed, a share of advertising proceeds and a guaranteed minimum sum over the course of the contract in the event the number of plays or advertising sales disappoint. iRadio also is expected to offer consumers the opportunity to purchase tracks via Apple's iTunes, the music business' largest source of digital revenues with an estimated $4.3 billion in download sales in 2012.

Bloomberg reports that in tandem with iRadio's rollout, Apple is revamping its iAd mobile advertising business, shifting the unit's focus away from campaigns integrated into iOS applications to audio messages optimized for the iRadio platform. While iAd staffers will continue to sell advertisements carried inside mobile apps, Apple is currently ramping up negotiations with advertising agencies including Omnicom Group's OMD to secure brand partners to run iRadio campaigns coinciding with the service's commercial debut. One former iAd staffer told Bloomberg the unit has long lobbied for tighter integration with iTunes, allowing the group to sell ads to entertainment companies with the promise of connecting campaigns directly back to iTunes sales.

The Wall Street Journal and The New York Times first reported on Apple's plans to enter the streaming radio segment last fall. The pressure to bring iRadio to market intensified last month with the launch of Google (NASDAQ:GOOG) Play Music All Access, a streaming music service offering personalized recommendations, featured content and music tailored to users' collections and previous listening behavior. Last week, Google said it would extend the service to iOS in the near future.

For more:
- read this AllThingsD article

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