Thursday, September 19, 2013

[TECH TALK]: Apple Releases iTunes Radio, A Pandora Alternative

Today, as part of its iOS7 upgrade, Apple AAPL +2.2% has released its long-awaited iTunes Radio service. Apple’s first in-house attempt at streaming radio – iTunes has long offered access to independent radio stations – provides a triple play of opportunity for the Cupertino juggernaut in advertising revenue, download sales and market share.

With this free ad-supported service, Apple is adding a new and potentially lucrative platform to its iAd advertising network. With Advertising Age reporting a minimum buy of $1 million, Apple has garnered blue chip companies like McDonald's MCD -0.81% and Pepsi for audio and video ads that run once every 15 and 60 minutes respectively.

Featured Stations
A catalog of millions of songs is useless if you can’t find one you like, so Apple is heavily promoting featured stations showcasing songs and artists it thinks its users will enjoy hearing. Featured stations at launch covered artists from Drake to Miles Davis, with curated guest DJ stations from pop acts like Katy Perry as well as Apple curated offerings for, among other things, Mexicano music. Recent job postings like this one for genre specialists with music industry experience to curate these stations hint at Apple’s reliance on tastemakers as well as algorithms to help you discover new music.

Custom stations
Of course you can create stations of your own from scratch. And as with other streaming services, you can base it on an initial song, artist or genre. You can skip up to six songs per hour. The limit is station-dependent though, so skips on your Country station don’t impact options on your Jazz station for example.

Each station has a slider that moves between Hits, Variety and Discovery, presumably letting you bias the algorithms Apple is using to select upcoming songs. You can also share your stations via text, email, Twitter or Facebook as well as with users in close proximity via AirDrop.

With iTunes Radio’s history tab you can browse through every song that has been played on your account. While you can’t replay these as you can with on-demand services, you can listen to iTunes’ familiar 90 second preview, make a purchase or add the song to your Wish List.

Similar to Pandora and Apple’s own Genius system, both of which offer a thumbs up/thumbs down option on recommendations, iTunes Radio lets you tweak the playlist with Play more like this and Never play this song options found under the Star icon on the play screen.

In iOS 7, Siri, Apple’s voice recognition assistant is available in both a male or female voice, each with a more refined speaking manner than the previous version. And you can use it to good hands-free effect in iTunes. You can play, pause or skip songs, request specific radio stations or genres, and utter, “Play more like this” to personalize upcoming selections. And in what’s likely every radio listener’s fantasy, you can determine the artist on the current track simply by asking, “Who sings this song?”

Initial Thoughts
As you’d expect from Apple, iTunes Radio is a clean, elegant entry to the internet radio game. Unlike Pandora, Apple has negotiated licensing fees directly with record labels ($0.0013 per stream according to Billboard) and is also reportedly sharing a percentage of its advertising revenue.

Apple is on decidedly more friendly terms with the music industry than Pandora, which is embroiled in a licensing dispute with ASCAP and a lawsuit with BMI over royalty rates. In a bid to further its reputation as tastemaker, Apple intends to work with record labels to identify and promote up and coming artists on the verge of breakout success via iTunes Radio curated recommendations.

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