Apple Inc. Signs Sony Corporation to Complete iRadio Trilogy

By Jake Barach,

Shutterstock photo

Apple Inc. ( AAPL ) has finally settled on a contract with Sony Corporation's ( SNE ) Music Group, according to a report from AllThingsD this morning.

With Warner Music Group and Vivendi SA's ( VIV ) Universal Music Group signing with Apple last week, the tech giant now has the means to launch its streaming radio, dubbed iRadio by the press.

While speculation thus far has suggested that Apple wouldn't announce the launch of its new product at its Worldwide Developers Conference (WWDC), which will take place June 10 to June 14, the addition of Sony could prove to be a game-changer.

The months-long struggle to sign all three music companies largely came about as a result of Apple's unwillingness to pay more than Pandora Media Inc. ( P ) and Spotify do for content, insisting that its product's direct link to the iTunes store would result in additional purchases of music that the major labels license.

Now that everyone is on board, Apple can compete for Pandora's 200 million users, and Spotify's 24 million users, 6 million of which are paid subscribers.

The new iRadio system is expected to generate revenue in a manner similar to Pandora, which currently offers users 40 ad-supported hours per month of music that are free to the user before he or she must pay for a $3.99 subscription to keep listening. Spotify, on the other hand, only offers 10 free hours and is only available on the iPhone and iPad with a paid subscription.

Apple has yet to mention any subscription service alongside its ad-supported streaming service, reports Apple Insider . Reports also suggest that Apple will provide the major music labels with 10% of its ad revenue, as opposed to the 4% labels receive from Pandora.

It's important not to overlook Google Inc.'s ( GOOG ) release of its Google Play Music All Access on May 15 as part of this story. Google charges users $9.99 per month for unlimited music access, much like Spotify Premium.

With iRadio's unique ability to potentially sync directly with iTunes accounts and the iTunes store, and with users granted the power to rewind songs, the music streaming market may be in for quite a shake-up.

(See also: Apple Inc. Is Actually Spending a Lot of Money, but on What? )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks , Technology
Referenced Stocks: AAPL , GOOG , P , SNE , VIV

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