By Ryan Bradley, senior editor
FORTUNE -- It's a Pandora-killer; it's going to take on Spotify; it will be streaming and almost certainly free.
1. Apple upended the music industry once, can it do it again?
Probably not. The company is late to the streaming game and, besides, music -- once the core of iTunes (just look at the name!) and Apple's e-commerce business are lagging and not nearly as lucrative as Apps, which are going gangbusters. Horace Dediu, who has done more than any outsider to dissect the iTunes economy, told me that once Apple (AAPL) moved into this space it would be purely reactionary and "pragmatic. They feel the economics are suddenly favorable, the infrastructure is paid for [more on this in a moment], the bandwidth is cheaper. But I don't really see this as an exciting thing. It's just flipping a switch." That's exactly right. Millions of people already listen to streaming music on their phones. Remember this, next week, during all the hoopla: Apple isn't reinventing the wheel here, because it doesn't have to. Which brings us to question two ...
2. Will it exist apart from iTunes?
That is: Will iRadio be a standalone app? Let's hope so. iTunes is already trying to be far too many things -- media player, store, library ... It is a bulky mess, albeit a lucrative one. Dediu estimates the iTunes ecosystem is a $17 billion a year business that costs $5 billion to run. Apple won't be abandoning this not-insignificant piece of company infrastructure anytime soon, but the margins are far better on apps, and video sales are growing far faster than music. iRadio may be a good way to bump music sales, though seeing as ...
3. If iRadio is its own app, how will it be integrated with iTunes?
Because you know it will be. The oft-repeated Steve Jobs adage that "people want to own their music" is still mostly true (most of those people are oldish and getting older, that is.) And, again, iTunes costs too much to run, makes too much money, is too big a thing to ignore. What iTunes doesn't do well at all -- and the reason Pandora (P) and Spotify and YouTube are eating Apple's lunch a bit -- is music discovery. And this is what all the kids are up to these days. Teens use YouTube more than any other music service -- it's their MTV (because MTV isn't playing music). Consumer habits tend to get locked in around 30, and Apple needs a better music discovery service if iTunes is to have any longevity. So it will send people to its store to buy songs, but how will that function? And will it function well? When Apple has flirted with music discovery in the past, it has not been very elegant. Also, remember, iTunes and everything around it, including iRadio, is building an ecosystem to sell more devices, which always have been and always will be the main event at Apple.
4. It's likely free, but will there be a paid version?
And what will the pricing of that be? This may not seem crucial, but think back to how 99 cents for a song became the industry standard. If iRadio's streaming service is, say, $7 a month instead of $10, that might just pull Spotify and Google (GOOG) and Rdio and others into line. It wouldn't be too difficult to undercut the competition in this way, seeing as Apple already spends so much on streaming much bigger bandwidth items (movies, TV shows) on iTunes all the time.
5. The free version is advertising sponsored, but how lucrative will this be for Apple?
Ignoring any of the associated costs with a paid version, or the money Apple makes from users going from iRadio to iTunes to buy a song, the ad dollars the company brings in will be very telling indeed. Sure, in the grand scheme of Apple the numbers won't be high, but consider how advertising has so dogged the mobile market. Traditional internet ads (popups, banners, and the like) work terribly on a small smartphone screen, and the money there has been minuscule But audio ads work the same way as ads you hear on the radio -- only better. Ads can be placed according to specific users' musical tastes (fans of Nickleback, not surprisingly, have different tastes than fans of Kendrik Lamaar). They're more valuable, because they are more targeted. At least, that's the theory (and what Pandora has been saying for awhile now). Now, with a mega-player like Apple in the mix, we might see if that really is the case.
Its new music service -- Google Play Music All Access -- has features that are similar to both competitors.
By Ryan Bradley, senior editor
FORTUNE -- After months of buildup, on Wednesday Google announced a new, subscription-based streaming music service called Google Play Music All Access. The name may be clunky, but the offerings appear bountiful.
Google (GOOG) secured deals with three of the four major record labels—Universal Music, Sony, and Warner MOREMay 15, 2013 1:39 PM ET
Also: A new Nexus 7 tablet coming this July?
This morning, the music streaming startup Rdio announced Vdio, a video companion service that will let Rdio Unlimited subscribers buy, rent, and share new and old movies and TV shows. [RDIO]
The first thing you'll notice about Vdio is that it's designed to solve the "what to watch" problem. It's not just that we've got amazing content, but that the experience is now MOREJP Mangalindan, Writer - Apr 3, 2013 12:53 PM ET
Exclusive: Google is planning to roll out a music streaming service to capitalize on the power of YouTube.
By Ryan Bradley and Jessi Hempel
FORTUNE -- YouTube, the world's largest digital repository of streaming media, will launch a subscription music service later this year. The service has its own negotiating team and operating unit but will likely have some overlap with new features also rumored to be coming to Google's Android MOREMar 5, 2013 10:35 AM ET
Its competitors say there's something to talk of how hard it may be for the company to turn a profit. They also say that won't always be the case.
FORTUNE -- Since Spotify's launch in Sweden three years ago, the music streaming service has become an industry darling by popularizing the "all-you-can-listen" business model. But it hasn't always been smooth sailing for the startup. Securing licensing deals with the big four MOREJP Mangalindan, Writer - Dec 14, 2011 1:54 PM ET
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* Late last night, Netflix (NFLX) announced via blog post that it is totally separating its DVD business from the streaming business and dubbing the former "Qwikster." Qwikster will be run by ex-Netflix exec Andy Rendich and will have separate user accounts, movie ratings and billing. Coming soon to the newly-christened service: Xbox 360, MOREJP Mangalindan, Writer - Sep 19, 2011 3:30 AM ET
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* Facebook unveiled the "Subscribe" button that will allow its 750 million-plus active monthly users to better control what their friends share with them, including updates, photos, videos, and links. It will also let users "subscribe" to public status updates from others much in the same way Twitter lets its users MOREJP Mangalindan, Writer - Sep 15, 2011 3:30 AM ET
Daniel Ek, the CEO of the online music service Spotify, has ambitious plans for penetrating the U.S. market. Profitability, for now, isn't a concern.
FORTUNE -- One week after Spotify launched in the U.S., CEO and co-founder Daniel Ek discussed his company's rapid growth at Brainstorm Tech in Aspen, Colo.
The simple, legal "all-you-can-eat" music service has made waves in parts of Europe with a freemium model that lets users listen to MOREJP Mangalindan, Writer - Jul 21, 2011 1:59 PM ET
One of the most innovative online music services to come along in years has finally hit the States. Here's why you should be excited. (Hint: no monthly listening cap for free U.S. users.)
FORTUNE -- Yes, America, Spotify is finally here.
After nearly two-and-a-half years of promises and speculation, the music streaming service opened up shop in the U.S earlier this morning and already promises to potentially transform the way U.S. listeners consume MOREJP Mangalindan, Writer - Jul 14, 2011 11:49 AM ET
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