Apple Inks Deal with Warner Music: Preps Streaming Service

Insiders suggest Apple is closer to launching its anticipated streaming music service for iTunes. Over the weekend, the company agreed to a licensing deal with Warner Music Group for rights to its recorded music and music publishing. According to people familiar with the matter, Apple is offering Warner’s publishing arm 10 percent of ad revenue, which is more than twice what Pandora currently pays major music publishers.

“Warner’s terms with Apple could pave the way for other major publishing deals to follow,” suggests The Wall Street Journal, adding that Apple’s service could be announced as soon as June 10 at the company’s annual developers conference in San Francisco.

“Apple’s plans for an Internet radio service… has been in the works for at least a year, but negotiations with music labels have been slow and focused on three issues: royalty rates; minimum guarantees in case Apple should decide not to sell ads during the first few months of launching the service; and the point at which Apple will start splitting ad revenue with labels, something it won’t do until a certain scale is reached,” notes the article.

Apple has already signed a deal with Universal Music Group for music rights but not publishing. The company has not agreed to a deal with Sony Music Entertainment or Sony’s publishing arm, Sony/ATV.

“People familiar with the matter have said Apple’s service would allow users to stream songs and be integrated with Apple iAd service, which allows developers to show ads within their apps,” reports WSJ. “Apple remains a leader in music downloads but faces competition from Internet radio services like Pandora and subscription streaming services like Spotify.”