For labels, Apple's iRadio deal could be sweeter than Pandora
What's unknown, however, is whether people will click through the app to buy songs that they can stream, and how successful Apple will be at pulling off the ad part of the business. Though Apple serves ads on mobile apps via iAds, the sources said that what the company is proposing to the labels is something different -- a full-on, multinational sales force that would sell audio ads akin to what Pandora serves up for listeners to its free service."The only thing concrete in the contract is the per-play rate," said someone familiar with the terms. "If you end up having no ad revenue, that's still zero. And we won't know what the buying habits will be. Will people streaming still take the time to buy from iTunes?"These sources said Apple and the labels are still hammering out what the revenue share of the ads would be but that the labels are pressing for generous terms -- possibly between 35 percent and 45 percent -- if they are to agree to a small portion of the per-stream revenue.Related storiesApple's iRadio service said to be delayed into summer, or longerApple's streaming music service could debut in 2013 -- analystHidden 'radio' buttons discovered in Apple's iOS 6.1Reports that Apple has been working on a streaming or subscription music service have lingered for years. Apple owns nearly two thirds of the legal music market, something that adds extra scrutiny to the possibility of a new service, or a change to its existing business model.Apple already has Internet music streaming inside of iTunes for desktops, as well as on its Apple TV devices, but not on iOS. The feature taps into streaming Internet stations maintained by third parties, and doesn't connect with Apple's iTunes Store in case a user wants to purchase a song. Users also can't record or save anything they hear. Adding intrigue to the possibility is a set of buttons and code referencing "radio" that were spotted in an update of Apple's iOS software in February. These features were not active or available on the software itself, but nestled in some code strings.CNET Senior WriterJosh Lowensohn contributed to this report.
