Apple are reportedly planning a move into digital music streaming, by developing a service that will rival Spotify and Pandora.
The iTunes creators are in the early stages of negotiating with record labels over the planned new service. According to the Wall Street Journal, three people have been briefed on the plans to send Apple users customized streams of music.
While Spotify and Pandora have a limited number of times a user can click on a certain track, Apple are currently negotiating with record labels directly in the hope they will be able to offer a better service to the market leaders and give the company more flexibility.
Like the non-subscription version of Spotify, Apple plans to include advertising, which will be carried through their iAd platform, but it is unclear if they will share the revenue generated with labels or pay a licencing fee. Apple’s stream would likely take the form of a preinstalled app on devices such as iPad and iPhone, or users may be able to access the music via their iTunes account.
It is also unclear if Apple’s music streaming site will be free or run through a subscription. Spotify and Pandora with ads is free, although users can pay for an ad-free service. No launch date has been set and it will not feature on the new iPhone 5.
Technology website, GIGAOM, has questioned the reasoning behind Apple’s plans to take on the web radio market, saying: “Building such a service has its risks. While Apple’s success with iTunes is inarguable, its record is spottier when it attempts to build services tangential to iTunes: both Ping and iTunes Match fell flat.
“But if it wants to avoid being disrupted or out-innovated, it probably feels it has to try something. Apple could be looking for a fresh way to appeal to users who’d rather use a simple, music-focused app customized to their music preferences like Spotify.”
Apple announced its decision to shut down its Ping service earlier this year. The service, which was launched in September 2010, allowed users to follow and receive updates from artists and their friends. It was the technology giant’s first foray into social networking and proved unsuccessful.