Apple is expected to insert audio ads and traditional mobile iAds into the music streaming service, according to a former Apple executive. The company is expected to pay out around 10% of ad revenue to music labels significantly more than the 4% Pandora pays out.
Selling interstitial audio ads -- ones that play between songs -- will allow Apple to offer the service free to users as is typical with most streaming music services. One music industry executive familiar with the negotiations between Apple and the major record labels said the terms of iRadio are more favorable for record labels than other streaming services because iRadio is expected to drive more song downloads.
Users will be able to purchase songs they hear via iTunes; however, AdAge says the service will not allow users to search for and play a specific song on-demand, like with Spotify.
Apple is expected to be able to charge more for ads on its service than Pandora since it can target users much better. Pandora can only target users based upon their sex, area code and listening habits; however, Apple can target consumers based on all of their entertainment tastes taking data from anywhere their Apple account can be used.
The company is said to have recently signed a deal with Warner but has yet to come to an agreement with Sony. It's thought that Apple will unveil iRadio at WWDC on June 10th.
Read More [via MacRumors]