Apple has been long rumored to be launching its own streaming radio service, but after failed negotiations with record companies the launch of the service was repeatedly delayed. The service will be very similar to other streaming music services on the market, most notably Pandora. It seems now that Apple has finally managed to sign deals with all the major record labels and it is now expected to officially announce iRadio at WWDC 2013 on June 10.
Now that iRadio is set for launch after several delays, we are hearing how Apple plans on making money off of its streaming service. Up until now, it wasn't clear how Apple would monetize the service to pay the record companies' licensing fees to stream their artists' music.
A new report from Bloomberg now sheds some light on how Apple plans to make money for itself and record companies. According to Bloomberg's sources, Apple will use engineers and sales staff in its iAd business to support the new streaming radio service. Apple initially began iAds to allow developers to create revenue by using the service inside their iOS applications. iAds can be targeted to iOS users based on the types of applications, music, movies, and books a customer has purchased through the iTunes store. iAds can be seen in many free iOS applications and now the service will reportedly be an important part of iRadio.
Apple plans to follow Pandora's recipe of providing a free streaming music service that will be supported by the ads that appear inside the application. According to Bloomberg's sources, the new plan of using iAds in iRadio will be led by Eddy Cue, Senior Vice President of internet and software services. Cue's in charge of iTunes, the App Store, and iAds, and together with Todd Teresi, a former Adobe executive, he will oversee iRadio's advertising business.
The move to using iAds as an important piece of the iRadio puzzle will help ensure that companies seeking to advertise through the service will get proper placement since Apple is in full control of iRadio. As it stands now, developers who use iAds in their iOS applications can choose what types of ads they want displayed in their applications. Sources believe Apple will use that difference as a highlight in getting more companies to join iAds when used in conjunction with iRadio.
iRadio will be a free service that could possibly be a default application that will come with iOS 7. It is expected to be demonstrated at WWDC 2013 on June 10 with an expected release date in the fall when Apple releases iOS 7 to the public.