In a bid to further branch out its products and services, Apple (News - Alert) has announced plans to venture into the world of Internet radio with streaming music. The company is said to be in the process of creating an Internet radio service that will stream customized music according to an end user’s tastes.
While Apple already sits atop the digital music market with its iTunes store, this move will further strengthen Apple’s integration of music into their products. The streaming music service is said to be taking the form of an app that will come pre-installed in Apple devices. Though the company is yet to come out with the full features that the app will have, it is rumored to have full integration with iTunes in order to customize the users’ music experience.
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Planning is still in its beginning stages and as of now, Apple is said to be in talks with major record labels that might be interested in being included in its streaming service. Rumor has it that Apple is negotiating for direct licenses with the record labels, which will allow the company to customize and manage the music for end users.
Providers that offer music streaming services only have limited licenses, which confines what they can do with the music. This is the primary reason why there are limitations in place when it comes to the number of times the song of an artist can play in a span of one hour.
Apple’s plan for this new service will put them in direct competition with providers of music streaming, such as Pandora (News - Alert) and Spotify.
With the rumors abounding of Apple creating a similar service, Pandora Media Inc.’s shares took a plunge on the stock market. One of the market leaders in advertising-supported Internet radio, Pandora already has had a difficult time becoming profitable since it went public last summer. The added threat of Apple looming in the horizon is bound to make things even more difficult for Pandora as well as its main competitor, Spotify (News - Alert).
"The 800-pound gorilla is pounding his chest, and people are starting to get nervous. Apple has big competitive advantages. It already has a big reputation in the music industry," said Richard Tullo, an Albert Fried & Co. analyst.
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Edited by Brooke Neuman