The terms Apple is offering to independent record labels for its upcoming iTunes Radio service have been revealed, and according to one report, they are more attractive than those offered by Pandora.
According to The Wall Street Journal, Apple sent out terms to independent record labels last week, detailing per-play rates, royalties and ad revenue the Cupertino company plans to mete out in return for content access.
The first year of iTunes Radio will see Apple paying 0.13 cents each time a song is played, with 15% of net advertising added on top of that. This will be doled out in proportion according to the label’s presence on the service. WSJ says the rates will increase to 0.14 cents per spin and 19% of ad revenue in the fledgling service’s second year.
The offer is more lucrative than the 0.12 cents Pandora pays for each song played. Apple is also reported to be offering more than twice as much in royalties compared to the established music service.
Songs that are already in a user’s iTunes library will be exempt form the terms, as will content selected by Apple for use in promotions. Also exempt will be songs that listeners skip within the first 20 seconds of the song. There will be a limit on skips of two songs per hour, per user.
