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Apple declares WAR on Spotify: iRadio bags streaming rights

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Apple is reportedly finalising plans for an internet radio station that will launch the fruity firm into a bitter conflict with streaming music services offered by Spotify, Google and Pandora.

Cupertino has signed a deal with Universal Music Group granting Apple the rights to UMG's recorded music but not to any music publishing rights, which covers songs written by Universal artists.

Apple has also signed a deal with Warner Music Group for both recorded music and music publishing rights. It is thought to still be in talks with Sony Music Entertainment and its subsidiary Sony/ATV, which is co-owned by Michael Jackson's estate and holds the rights to the Beatles' songs as well as modern ditties penned by Taylor Swift and Lady Gaga.

Apple will want to have all the loose ends tied up before its annual WWDC conference on 10 June. Tim Cook is expected to wheel out new Macbook models to replace the current range.

The new music service, dubbed iRadio by the tech press, is expected to be free and paid for by advertising, although there may be the option to take a subscription which will get rid of the corporate messages.

Despite the enormous popularity of streaming music, it is not particularly lucrative for performers and songwriters. Lady Gaga was reported to have received just over £100 from Spotify in 2009 after her song Poker Face was played more than a million times. Just last year, publishers were fighting off Pandora's attempt to lessen the percentage of revenues it pays them, which according to the New York Times is about 4 per cent. The same article claims the major labels want Apple to hand over something in the region of 10 per cent.

This desire to cash in on a notoriously unprofitable sector may have been a sticking point in Apple's negotiations with the music giants. The rumoured iRadio has been on the cards for some time, but making it happen has proven difficult for Cupertino.

However, despite teething problems, any Apple-endorsed streaming music service has the potential to be extremely profitable, as it would allow customers to preview music and then buy it directly from iTunes. ®

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