Apple working on streaming radio service

Apple is reportedly planning to launch an online radio service in the next few months. The precise details aren’t clear, but it’s already hit existing firms with Pandora seeing a stock price slump.

Bloomberg reports insiders as saying Apple has “intensified talks” with music companies. The source says deals could be confirmed by mid-November, though the two sides are still talking about how to carve up ad revenue. The record companies want an up-front licensing fee, a share of ad sales, and the right to insert their own ads promoting artists on their books.

Representatives of Sony, Warner and Universal (the “big three” since Sony took over EMI) are said to have visited Apple headquarters in the past few weeks.

Exactly how the service will work is still under negotiation, though it appears it will only be available through apps on Apple portable devices. It won’t be available on Android or through a computer’s web browser.

One of the keys to the service may be that Apple is reportedly seeking a comprehensive license. That would mean that, as long as the record label gets it ad share, there are no restrictions on playback. That’s in contrast to services such as Pandora where licensing means a listener can only hear music from a particular artist a certain number of times each hour.

What isn’t yet clear is exactly what options would be available to the user, for example whether they are merely able to select a custom station, or if they can specifically choose which track to listen to at any precise moment. If it’s the latter, it’s horrendous news for rivals like Spotify, but could also mean Apple running the risk of cannibalizing its own iTunes sales.

Pandora certainly seems to be the biggest potential loser from an Apple launch, with its stock falling 20 percent since the news broke.

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