Apple's iRadio is go: Sony licenses service at 11th hour

Apple is expected to unveil its long-awaited streaming online music discovery platform iRadio tomorrow (Monday, June 10), after signing an 11th hour licensing agreement with Sony's label and publishing companies.

The news follows months of heated negotiations between Apple and Marty Bandier (pictured), the boss of Sony's part-owned publishing company Sony/ATV, which represents songwriters such as Noel Gallagher, Taylor Swift and Lady Gaga, and copyrights for songs by the Beatles, Michael Jackson and the Beach Boys.

Bandier has been seeking a higher percentage of subscription and ad-funded royalties from iRadio. It is believed that he originally played hardball - requesting that Sony/ATV's share of overall revenue accrued from iRadio should rise from 5% to closer to 50% for his company and its songwriter clients.

However, he is understood to have eventually been willing to accept a rise to 10% or 15% as a first step.

COMING SOON: http://shop.palacemusicgroup.com.previewdns.com/

It was revealed last week that Sony/ATV's rival publisher Warner/Chappell had agreed a 10% royalty rate from iRadio advertising revenue with Apple, and it is likely Bandier struck a similar deal soon after.

That figure is at least double the 4-5% royalty the largest publishers currently earn from iRadio rival Pandora, which boasts more than 70m “active listeners”.

Apple is expected to formally announce iRadio at its Worldwide Developers Conference in San Fransisco, US, tomorrow.

 

Traditionally, publishers have only recieved a single digit point royalty from Apple's iTunes download service, with the majority of revenues being collected by music labels - and a third being retained by Apple itself.

Bandier's agreement with Apple left the way clear for record label Sony Music to also sign a licence deal - meaning that Apple now has deals in place with the three major labels and their related publishing divisions/companies.

Speaking to the FT, Bandier paid tribute to Eddy Cue, who oversees Apple’s iTunes store, App store and iBookstore, for his willingness to negotiate.

“He’s someone who’s sensitive to music and musicians. While I can’t say he just rolled over, when it came time to pull the trigger, he did it with grace,” Bandier said, adding that the deal was “a major step forward in recognition of the contribution songwriters make to a hit record," and that he was confident Apple's ad sales team would make a success of the launch.

COMING SOON: http://shop.palacemusicgroup.com.previewdns.com/

The FT reports that Universal Music struck its licensing deal for iRadio in May, securing a one-off payment as well as a royalty of about 12.5 cents per 100 tracks streamed, as well as a share of advertising revenue, and a guaranteed minimum sum over the two-to-three-year deal.

© 2013 PMG Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.