Apple Inc. unveiled its new iTunes Radio service for iOS 7 earlier this month at its World Wide Developer's Conference. When it was announced, Apple made deals with Sony Music, Warner Music Group and Universal Music Group in order to have the biggest three music labels under its belt before launch.
Apple seems like its not content to stop there and is currently in the process of courting several indie music labels in the hopes of giving iTunes Radio a leg up on other music streaming radio services like Pandora who already offers its users access to indie music and the ability to hear and discover new artists.
According to The Wall Street Journal, Apple is upping the appeal for labels to put their artist's names on Internet radio though, offering 0.13 cents for each track played for more than 20 seconds as well as 15 percent of the net advertising revenue generated by their music for the first year after the agreement is made. This is very lucrative since Pandora only offers 0.12 cents per track and only half as much in ad revenue to indie labels. iTunes takes it a step further, after the second year of the contract, the per track payment is increased to 0.14 cents and a 19 percent share of ad revenue.
The new agreement does come with one catch that Pandora doesn't have. No revenue will be paid for tracks played via iTunes Radio that already exist in the user's iTunes library. The mentality behind this is simply that if the user has the song in his or her library, the music label and band have theoretically already made their money elsewhere for the work. Despite the condition, iTunes is still very appealing for indie record labels who can now promote their band's music while generating a bit of revenue.
iTunes Radio will launch sometime in the fall when iOS 7 comes out for most of Apple's mobile devices.
