According to a document obtained by the Wall Street Journal, Apple will pay 0.13 cents and 15 percent of advertising revenue to major labels for every song played on iTunes Radio in its first year, climbing to .14 cents and 19 percent in year two. In comparison, Pandora currently pays 0.12 cents per song, and WSJ added that Apple is offering publishers more than double Pandora's rate for royalties. There are some exclusions to Apple's offering, however: it won't need to pay for songs streamed for 20 seconds or less, those that are already in your iTunes library or certain promoted tracks. For its part, Pandora said that comparing the two is unfair, since varying features between the services could trigger royalty payments differently. It also addressed recent controversy about those royalties in a detailed blog post (see the More Coverage link after the break). In addition, insiders say that Apple's primary aim is to encourage listeners to buy more tracks on iTunes, in turn boosting hardware sales. Still, the new service will no doubt reap the benefits of Apples new iAd mobile advertising platform, so it's likely that Cupertino will have its cake and eat it, too.

Filed under: Internet, Apple

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Source: WSJ Digits