Digital Top Stories

Apple launches iTunes Radio

By | Published on Tuesday 11 June 2013


As expected, Apple finally announced its long awaited streaming music service at its World Wide Developers Conference yesterday.

To be called iTunes Radio (iRadio, after all, is already used by another company), the new service will be of the Pandora model, providing users with a personalised stream of music but only limited on-demand functionality. It will be free to use, funded by advertising, though subscribers to Apple’s premium digital locker service iTunes Match will be able to access an ad-free version.

iTunes Radio will, initially at least, be restricted to Apple devices, accessible via iPhones, iPod Touches, iPads, Apple TV and iTunes on the Mac. Most of the functionality on offer matches that of other ‘interactive radio’ services – playlists based on past usage, track skipping, the option to block tracks for good – though the iTunes service will have more overt download sell-through. The new service will launch in the US at first, at some point this autumn, before global roll out.

In theory global expansion should be easier than for Pandora, which licences sound recording rights through the American statutory rights agency SoundExchange rather than directly off the labels. The collective licensing of digital services varies from territory to territory causing complications as Pandora moves abroad, whereas – in theory at least – once Apple has a template agreement in place with each of the major record companies, similar arrangements should be available in each market.

As previously reported, getting agreements with the majors involved some tough negotiations, and it’s thought both the labels and music publishers secured pretty good terms, though with a few concessions for Apple at the outset, giving the tech giant an opportunity to build the advertising side of the business, and to reduce its risk. Universal was first to sign up, followed by Warner and, at the final hour, Sony. Work is now ongoing to get the indies labels and publishers on board too.

It remains to be seen if Apple’s long-awaited move into streaming – the ‘access’ model of digital music – is in anyway a gamechanger. Unlike with the iTunes download store, Apple is very late to the party. And with a pretty standard service that is more limited than those provided by many competitors, both in terms of device compatibility and on-demand functionality.

Though, as Apple bosses reminded everyone with their parade of stats before announcing iTunes Radio yesterday, the company has sold 600 million iOS devices worldwide that can run the new service, it has access to 575 million iTunes accounts, most with credit card info provided, and it still commands a 63% share of the download market. Plus there is still an argument that less interactive streaming services are actually more attractive to mainstream consumers, and it wouldn’t be the first time Apple scored big time with an unoriginal idea.

Though Apple’s competitors in the streaming music space remained mainly upbeat yesterday, arguing that the tech giant’s move into streaming proved that ‘access’ rather than ‘ownership’ was the future of digital content, as they’d always said, while insisting that their services were sufficiently different to iTunes Radio, or their existing user-bases sufficiently loyal, that Apple moving in to their territory didn’t matter.

And they may well be right, in that iTunes Radio will likely go after those still downloading, and new iPad and iPhone owners yet to properly engage with any digital content platforms, more than the early-adopters already signed up to a Pandora or Spotify etc. Though as nearly every streaming service seems to need to break into the mainstream to have a sustainable business long term, having a mega-player like Apple also going after that market isn’t going to help.