Apple preparing to launch ad-backed ‘iRadio’

According to Reuters, Apple is gearing up to sell audio ads on a music-streaming service it intends to unveil at its developer’s conference WWDC next week.

The music service, dubbed “iRadio” by the tech industry and media, is expected to closely resemble Pandora Music in its monetisation strategy, featuring audio and banner ads sold through Apple’s iAd mobile network, the sources said.

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Apple has been working to put together a streaming music service for the past year and is said to have contacted some of its bigger advertisers though it hasn’t started selling the service extensively yet.

The service is expected to launch later this year and will also have ads currently sold by the iAd division. Apple has made selling ads for the new music streaming service a focus for its iAd unit, which will continue to sell regular mobile ads. Selling big-brand campaigns to advertisers would be a key priority for the unit, the people said.

The ad-supported music service from Apple is expected to be free to users and will go head-to-head with other similar services such as Google and Pandora.

Google’s business model is an ad-free subscription model where consumers pay a flat fee for listening time. Sweden’s Spotify offers a mixed model, with different payment tiers: free, limited listening with ads, or paid-for ad-free levels which can be listened to on computers and then mobiles.

To ensure the service debuts with ample content, Apple has been hurrying to ink deals with the music industry. It already has agreements with two of the three big music companies, Warner Music Group and Universal Music Group, but remains in talks over music streaming rights with Sony Music Entertainment and its separate publishing arm, Sony/ATV.

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