How Apple's iRadio Could Take Over the World of Music

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Apple (NASDAQ: AAPL ) 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: SNE ) 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 future.

Sirius XM Radio (NASDAQ: SIRI ) proved that some consumers are willing to pay for radio, especially if it involves exclusive programming and is built into brand-new cars . 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: P ) to Google's (NASDAQ: GOOG ) YouTube, Turntable and the Internet's best-kept secret , 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 different.

On smartphones, Apple should absolutely support BlackBerry (NASDAQ: BBRY ), Android, Windows Phone 8, Ubuntu and any other OS available.

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 Follow him @LouisBedigianBZ

(c) 2013 Benzinga does not provide investment advice. All rights reserved.

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

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

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