) is reportedly on the cusp of a significant agreement with
at least one
major record label.
The first deal involves Universal Music Group, one of the most
prominent labels within the industry. Warner Music could sign
after that, leaving Apple to woo Sony (NYSE:
) before making a big push for radio dominance.
Radio is just one part of the equation, however. Apple stands
to gain a lot from this music deal in the way of ad revenue and
expanding iTunes sales. Most of all Apple will likely use iRadio
to sell more iPhones and iPads.
This is how Apple could pull it off:
Never Charge a Dime
Most everyone seems to assume that Apple will want to charge a
monthly fee -- if not right away, then at some point in the
Sirius XM Radio (NASDAQ:
) proved that some consumers are willing to pay for radio,
especially if it involves
and is built into
. If Apple takes this route and builds a satellite radio service,
it might be able to get away with charging a fee.
However, if Apple uses the Internet to deliver its content (as
many expect), the company needs to remember that most Internet
users are already getting their music for free. In addition to
piracy, there are dozens of ways to legally enjoy music without
spending a dime.
From Spotify and Pandora (NYSE:
) to Google's (NASDAQ:
) YouTube, Turntable and the Internet's
, there is no shortage of online music options.
Thus, the first step toward music service success is to keep
it 100 percent free.
Offer Music That Scares Industry Executives
Independent music -- truly independent music -- scares record
labels. They want to
control the industry
, and they cannot do that if independent artists are allowed to
rule the airwaves. This is why music listeners had to turn to the
Internet (and before that, mom-and-pop record shops) for music
that is truly independent.
Apple should not shy away from indie music. If artists want to
get their music out there…let them! Treat iRadio like the App
Store and allow anyone at any time to drop their music into the
hands of iDevice users.
If this happens, artists that would have never gotten a fair
shot at stardom may finally be able to hit it big, go on a
national tour and produce a music video that is viewed
several million times
Give iRadio to Everyone
Windows users can download iTunes -- iRadio should be no
On smartphones, Apple should absolutely support BlackBerry
), Android, Windows Phone 8, Ubuntu and any other OS
While this might sound counter-productive (why would people
buy an iDevice for iRadio if they can get it elsewhere?), Apple
will greatly limit the service's potential if it makes iRadio
exclusive to Mac and iOS.
Launch With Fresh Music
What do all music services have in common? They just sort of
appear out of nowhere. There are not any big records to
commemorate the arrival of a new service.
While Apple may not be able to control when new albums are
released, it could certainly choose to launch iRadio alongside a
number of big records already on schedule.
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
firstname.lastname@example.org. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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