By Jimmie Geddes email: firstname.lastname@example.org | Jan 08, 2013 10:20 AM EST
There have been whispers that Apple has been developing a streaming radio service rivaling Pandora and those whispers are beginning to get louder and louder. It is believed that Apple will launch a streaming radio service this year that many people are calling iRadio. However, Apple has a few hurdles it must face before it can actually launch this service.
The biggest challenge Apple has reportedly been facing is agreements with record labels over the licensing fees Apple would have to pay to use the labels' catalogs. Reports have claimed that Apple was offering to pay a lower royalty rate compared to what Pandora currently pays even though Apple plans to offer users of its service more features than Pandora currently offers.
Pandora must pay a statutory rate that was set by Congress which limits the way users interact with songs. The terms cap the number of times a user can listen to the same song or an individual artist. Sources have reported that in exchange for more flexibility, Apple is offering labels a percentage of the ad sales that will be generated by the service. It has been reported that the music labels don't feel the offer Apple has tried to negotiate is big enough for them to satisfy Apple's demands. As a result it delayed the service from coinciding with the launch of the iPhone 5.
Apple is also going to have to come up with a new name for the service as iRadio is already used by a few different companies. iRadio is a radio station in Ireland, it's also a Web site that offers Internet radio and streaming music, just to name a few. Apple is no stranger to choosing a name for one of its products even though it's already taken. When Apple announced the original iPhone, the name had already been trademarked by Cisco. Cisco sued Apple for trademark infringement, the two companies ended up settling, allowing both companies to use the name. Apple also faced the same issue when it was getting ready to launch the original Apple TV - it was believed they were going to originally name it iTV. iTV is a major TV network in the UK who reportedly sent Apple a letter warning them not to use the iTV name or they would pursue legal action. Apple ending up launching their set-top box with the Apple TV name.
According to a new report Apple will definitely be launching the streaming service this year and this is what BTIG analyst Richard Greenfield is expecting:
"Consumer behavior (is) increasingly shifting toward access to a music catalog from ownership of specific songs. We expect iRadio to be incorporated into the iTunes iOS app with personalized radio functionality akin to Pandora, integrated with iTunes to purchase music and other music related content such as concert information/tickets/merchandise via Live Nation (LYV) and Ticketmaster."
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