How much is Apple paying for iTunes Radio?

How much is Apple paying for iTunes Radio? The answer may (not) surprise you...!

If you've been wondering how much exactly Apple will be paying out for all the music they'll be making available via iTunes Radio, it looks like some answers might just be available for now. At least according to Hannah Karp and Jessica E. Lessin of the Wall Street Journal:

During iTunes Radio’s first year, Apple will pay a label 0.13 cents each time a song is played, as well as 15% of net advertising revenue, proportionate to a given label’s share of the music played on iTunes. In the second year, that bumps up to 0.14 cents per listen, plus 19% of ad revenue.

That compares to the 0.12 cents Pandora pays labels per listen on its free service. Apple is also offering music publishers more than twice as much in royalties than Pandora does.

How much record labels, and more importantly, artists get paid for the use of their work has been and likely will continue to be contentious. Many artists got screwed by labels in the early days, and little has been done to rectify that over the years. iTunes, however, and the digital music revolution, has made it possible for many artists to disintermediate the labels and make a living off sales of their music, not just sales of concert tickets.

Subscription and streaming services might be a little harder to figure out, at least initially. Apple's model, however, which bundles in advertising and, potentially more importantly, an incredibly easy path to iTunes purchases, could be different.

iTunes Radio will be made available to the general public later this fall. Do you plan on using it for music discovery, and, do you think that'll lead you to buying more music as well?

Source: Wall Street Journal

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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There are 9 comments. Add yours.

emjayess says:

Yes, & yes--iOS 7 will likely be bad for my budget!

Antrikshy says:

Bad for your budget? iOS 7 is a free update and iTunes Radio is also a free service with ads (unless you want iTunes Match).

Eric Mason 0321 says:

I believe he is referring to how much more music he will purchase using the discovery feature of iTunes Radio.

jckmrgn says:

Well it would be great if it were available in Australia...

Sent from the iMore App

Antrikshy says:

They said they will be adding countries soon. Don't know about Aus.

swhaley1231 says:

I read online that you simply need a US iTunes account to be able to use it right now.

tlo07 says:

I would like to try iRadio because since Slacker's major update I have so much trouble with it stopping or buffering, etc. I would sign up for Match so I wouldn't have to listen to ads, though. The only thing is I was under the impression Match will edit your songs. Is that true? Because I hate that.

darnellb says:

I've had iTunes Match for a little over a year now and you're right - iTM does edit a lot of songs, which definitely sucks - plus not all album art is available either. iTM definitely needs some attention and love, and actually hasn't improved much since its launch. To get iTunes Radio w/ no ads though is pretty sweet trade-off IMO though. Most of my library doesn't have explicit content anyway, but I do hate that some of your content is clean when the original versions weren't. Hope this helps.

Joseph Allen2 says:

itunes radio sucks its nothing more then a hard sell for i tunes. you get only a hand full of songs then its buy me buy me. in no way at all is this radio. just another way to get your money. its not iradio its ibuy , iwantadollar, iwantmoremoney, and iscrewyouconsumer