Apple Strikes at Pandora by Securing All Label Licenses for iRadio

The big holdout, Sony Music Entertainment, now appears to be completely on board.  The Wall Street Journal reported Friday morning, and I quote:

“Sony Music has signed on to Apple’s forthcoming iRadio service…

…the deal means that Apple now has agreements with all three major music labels.”

Just recently, Apple inked a deal with Warner Music Group.  Universal Music Group, which now encompasses EMI, was the first to say yes.

All of which sets the stage for an announcement at the Worldwide Developers Conference (WWDC) on Monday, though the Journal notes that Apple will only be showcasing the product to developers.  The fully-baked, consumer-ready souffle comes next.

But wait! What about Sony/ATV (which is completely different than Sony Music Entertainment)?  Here we enter the tricky world of music publishing, where Sony/ATV is leading the charge towards direct licensing and much higher rate demands.  Apparently the snags in those discussions are smaller.

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So, kill Pandora, kill?  One ‘problem’ is that Apple is inking direct deals, which means labels and publishers could turn around and do the same with Pandora.  One counterargument is that labels have little interest in overridding existing SoundExchange structures, but that’s just the labels.  Case in point: Sony/ATV has already forced a direct deal, and extracted higher royalties from Pandora in the process.

And what if Apple decides to swipe Pandora off its iOS deck, sort of like YouTube?  “I don’t think we have any fear of losing distribution on any of the iOS platforms,” Pandora CEO Joe Kennedy recently told investors.  “That would be suicidal for Apple to remove Pandora from its platforms…  they’d have to compete with us straight up.”

Written while listening to Mux Mool and Icona Pop.  Image by Ephemeral Scraps, licensed under Creative Commons 2.0. 

38 Responses

  1. Visitor

    Extremely exiting! Nobody can move the music world like Apple.
    Let’s hope they’ll kill Pandora and Spotify, without sacrificing iTunes…

      • Visitor

        Why not?
        Consumers know, trust and use Apple. Nobody knows Spotify.
        And show me an artist who would rather use Spotify than Apple.

        • Visitor

          …as for Pandora… 🙂
          “Shares in Pandora have plunged 17 per cent this week as reports circulated that Apple was close to announcing its rival service.”

          Die, Pandora, die! 🙂
          (Goes for Spotify, too.)

          • antivisitor

            Wishfull thinking. Consumers will decide who is going to survive or die and consumers are starting to like on demand streaming more and more. On demand streaming is not what Apple does.

          • Visitor

            “Consumers will decide who is going to survive or die”
            Right holders can kill Spotify any day…

          • antivisitor

            They will not kill their future cashcow. Streaming is becoming a great source of income for big labels. And it already is in Europe.

          • Visitor

            Spotify? A cashcow? 🙂
            Give the labels a better paying alternative and Spotify is history.

          • antivisitor

            Any alternative can only pay more if customers are willing to spend more for music than $10 a month. That’s highly unlikely don’t you think?
            What’s your plan, force people to buy downloads by putting a gun on their head?

          • Visitor

            “Any alternative can only pay more if customers are willing to spend more for music than $10 a month”
            Nonsense, it just has to be big and based on ads.

          • antivisitor

            Stupid idea. Won’t work. Ads don’t bring enough dough.

  2. Champion

    YouTube is still available on iOS. It’s an application, just like Pandora.
    Also, Apple entering a market doesn’t guarantee their success. They actually have an incredibly poor track record with new services: Ping and Maps are two recent examples of huge failures that did absolutely nothing to harm entrenched competitors.

      • Me

        It’s still available as an app. It’s just doesn’t come pre-loaded on phones like it used to. The article you linked is from last August, before the iPhone 5 was released, and therefore is outdated.

        • PBNJ

          There was a time after that when YouTube wasn’t available as an app anywhere for the iPad, I think they had some HTML 5 work-around as an emergency patch.

          • Casey

            That was Google’s doing. They have a long history of being uncooperative with Apple products.

    • smg77

      There is still a Youtube app for iOS you just have to download it from the app store. Apple just doesn’t install it by default any longer.

      • Champion

        Heh, not exactly. Unlike YouTube, Pandora was never a bundled application that came with the OS (the original YouTube application was actually written by Apple).
        YouTube is still on iOS, and better than ever. Pandora will be too. Paul’s speculation that Apple might remove it is totally ridiculous, and based on a complete misunderstanding of what happened with YouTube.

        • Shway-zeee

          Stop re-writing history. Remember this is Apple’s backyard, not Pandora’s.

    • Casey

      Yes, Apple is powerless to remove Pandora unless they have a valid reason. Simply removing it because it is a competitors product would prompt a legal suit Pandora would win.

      • B's Wax

        Apple has the right to remove anyone anytime just like a country club can remove any member anytime for any reason.

          • B's Wax

            Just look at Grooveshark, removed from the Apple Store because Universal Music said so, okay? They didn’t need a reason and they didn’t get sued, nor did the Justice Department come knocking.
            thank you

          • Casey

            Grooveshark violated the terms they agreed to. That enabled Apple to give them the boot, no questions asked. Grooveshark didn’t fight it very hard because they knew very well they had no case and no money to try to prove they had one. Simply because a product is competing is not valid ground for removing an app. The app has to be a violation of the terms developers agreed to, or it would indeed prompt antitrust regulations. It doesn’t matter what Apple says they have the right to do, because they don’t. They just like to bully those around who don’t have the money to fight them. Pandora would.

        • Casey

          They want you to think that, but no they can’t.

  3. Jeff Robinson

    The new CD Baby deal tracking publishing for artists could weigh in heavily with this. Will Tunecore have the same clout for placement in bulk with Apple? If Sony got it’s own deal, will CD Baby be able to do the same or will ‘indie artist’ hazing continue?

  4. Visitor

    iHeart Radio guy myself. Best of all worlds. But at the end of the day, it’s about loyalty, access and a killer algorithm. Just my 2 cents. Carry on.

  5. what about indie artists?

    So, Apple will only have major labels on iRadio?
    Indie artists haven’t received any kind of contact for this service, yet.

    • Visitor

      We are talking about real musicians here, not people recording noise in their parents basement.

      • Visitor

        “people recording noise in their parents basement”
        That’s your idea of artists who want 70% of the cake? 🙂

    • Visitor

      “Indie artists haven’t received any kind of contact for this service”
      You’ll use your usual aggregator…

  6. pkrulez

    Consumers will decide who is going to survive or die.Lets See

    • Visitor

      …also love the fact that songs on the currently playing screen and in the playback history have BUY BUTTONS! 🙂

  7. DudeNoDude

    Another Great Thing About Canada…NO Pandora and NO Spotify….but we have iTunes!!
    So long Pandoreeee and Spotifiiii…goin’ the ay of the DODO bird….