Apple blinks, inks deals with labels in time to intro 'iRadio' on Monday

Some sticking points remain, but it now seems likely Apple will announce free Internet radio service at WWDC

With just days to spare, and as one analyst expected, Apple blinked in negotiations with Sony Music, giving the Cupertino, Calif. firm the green light to announce an Internet radio service on Monday, several reports said Friday.

Last-minute hitches could still stymie an announcement, however. Reports on Saturday said the labels and Apple had yet to agree on payments for skipped songs.

The Wall Street Journal's AllThingsD blog, citing sources close to the discussions, said Apple had struck a deal with Sony Music for recorded music rights. A little later that day, Billboard, the music business's trade publication, added that Apple and Sony/ATV, the music publishing arm, had also wrapped up an agreement.

According to Billboard, Apple agreed to pay Sony 10% of the advertising revenue generated by the future service. Apple had initially offered to pay 4.1% of all ad revenue.

Previous reports said Apple had brokered deals with the recorded music and publishing arms of Warner Music, as well as the recording group of Universal Music.

By wrapping up negotiations, Apple is now free to announce its Internet radio service -- dubbed "iRadio" by pundits, although that name has already been registered in the U.S. Patent and Trademark Office -- next week at the Worldwide Developers Conference (WWDC), which begins Monday with a 10 a.m. PT keynote.

The last-minute deals were expected by Aram Sinnreich, a media professor at Rutgers University, who on Monday said that the labels held the cards, given Monday's deadline. "The labels are playing chicken," said Sinnreich in an interview at the time. "But Apple will blink."

Sinnreich had also predicted that Apple would dangle big advances in front of the labels, which he said "love cash more than anything." Billboard said that was what Apple did, offering the labels advances large enough to boost Apple's per-play, per-listener payment rates above what rival Pandora offers.

Apple's iRadio will be a hybrid, said Billboard, letting users build their own "stations" from music they choose -- just as does Pandora -- but also using tracks they've bought through iTunes or stored on iCloud. In a twist, the labels will be able to propose or insert music into the stream that they believe fits the user's music choices. A one-click track purchase button will be prominent in the iTunes-based service.

Sinnreich, who has followed the rumors of a potential Apple-branded music service for years, said it's important for Apple to get iRadio on track. "They've lost some of their luster," Sinnreich said of Apple, ticking off Android's larger market share, the unchanged look of iOS, and the lack of another innovation -- like the rumored "iWatch" -- to expand the company's portfolio.

"WWDC is their chance to polish off their image, and wow us with iOS 7 bells and whistles," Sinnreich said. He saw iRadio as one of those whistles.

Apple isn't expected to actually launch iRadio next week, but to announce that it is coming, demonstrate some of its features and perhaps talk in general terms of an availability date.

Most analysts believe Apple will unveil a new iPhone this fall, following the schedule of last year's iPhone 5, and simultaneously ship iOS 7 as an upgrade for older models.

This article, Apple blinks, inks deals with labels in time to intro 'iRadio' on Monday, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

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