Apple signs Sony/ATV to iRadio, last major hurdle before WWDC

A launch of Apple Radio at WWDC seems all but guaranteed, now that it has the world's biggest publisher on board as well.

Paul Sloan Former Editor
Paul Sloan is editor in chief of CNET News. Before joining CNET, he had been a San Francisco-based correspondent for Fortune magazine, an editor at large for Business 2.0 magazine, and a senior producer for CNN. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.
Paul Sloan
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Martin Bandier (right), CEO of Sony/ATV Music Publishing, just signed a deal for Apple radio. Also in this picture from the Songwriters Hall of Fame ceremony in June 2010: Leonard Cohen and Taylor Swift. Larry Busacca/Getty Images for Songwriter's Hall of Fame

At this point, Apple is all but certain to unveil iRadio -- or whatever it calls its Internet radio service -- at Monday's Worldwide Developers Conference in San Francisco.

Early Friday, Apple reached a deal with Sony Music, the last of the three major labels it needed to sign up, according to people familiar with the deals. And now Apple has also signed up Sony/ATV/ That deal, first reported by Billboard, was confirmed to CNET by a Sony/ATV spokesperson.

An Apple spokesman declined to comment.

Sony/ATV, the world's largest publishing house, is jointly owned by Sony Corp. and the estate of Michael Jackson. Its chief, Martin Bandier, has been at odds with Apple throughout the past year of off-and-on negotiations, according to industry sources.

A group of investors, including Sony Corp., bought EMI's music publishing business last year for $2.2 billion, and Bandier, a longtime music exec, made it a mission to get fatter royalty rates than what's required by the performance rights organization, which includes ASCAP and BMI.

Bandier withdrew digital rights from ASCAP and BMI to do separate deals, and that became a roadblock to Apple launching a streaming radio service last year, according to industry sources. But a lot has changed since then. Pandora, the top Internet radio company, now has 70 million active users. Spotify, albeit a different service than Apple radio, is gaining traction. Google just launched a subscription music service and is readying another service tied to YouTube, according to sources. Put it all together and Apple has doubtless been feeling the pressure to release a competing product.

While Bandier might not have gotten the exact deal he wanted a year ago, he certainly did better than what Apple was offering last year. Sources say the deal that's been on the table for publishers -- the one signed by Warner/Chappell earlier this week and now presumably with Sony/ATV -- has Apple paying publishers more than twice the ad share revenue they currently receive from Pandora. Specifically, the Warner/Chappell deal has Apple paying 10 percent of Apple radio's advertising revenue, according to people familiar with the terms.

It's likely that Universal Music's publishing arm will be next, and, come Monday, Apple fans will at last see what all this iRadio talk is about.

Apple's WWDC 2013 keynote: Join us Monday, 10 a.m. PT (live blog)

Update, 5:34 p.m. PT: Added confirmation by Sony/ATV spokesperson.