When Apple was engaged in long, protracted negotiations with record companies over terms for its iTunes Radio service, many assumed that the company was trying to get copyright owners to take less money per song play than competing Internet radio service Pandora. The Wall Street Journal reports that this is not the case, however, because Apple is paying out $0.13 per song play, or 1 cent more than what Pandora pays out. In addition to royalties paid per song played, Apple is also dishing out 15% of its advertising revenue over the first year of its contract and will bump that number up to 19% of advertising revenue in the second year of the deal. The Journal also says that Apple is also “offering music publishers more than twice as much in royalties than Pandora does,” so it seems that iTunes Radio has the potential to be much more lucrative for record companies going forward.
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