Speculation abounds as industry insiders anticipate Apple’s upcoming announcement about its new music streaming and audio ad service next week at the Worldwide Developers Conference (WWDC) in San Francisco.

Dubbed “iRadio” by tech bloggers and the media, it is expected that Apple will use the service to sell highly targeted audio ads through iAD, its existing mobile ad service.  Audio ads are typically more expensive than banner ads so this is likely to result in higher revenue for Apple’s iAD service than what it currently takes in now. This should allow them to offer the music streaming service to its users for free. Official  representatives have yet to comment.

An earlier report indicated that iRadio terms should be more attractive to major record labels as compared to other similar music streaming services because of the potential for it to increase song downloads. It’s expected that iRadio will have the ability to sync with iTunes, allowing listeners to download and keep their favourites songs forever on any iOS device. Apple reportedly has agreements already in place with Warner Music Group and Universal Music Group. Sony and Sony /ATV are reportedly still in talks with Apple.

iRadio’s business model will be most similar to that of Pandora, which provides personalized radio listening experience based on user preferences.  Following earlier reports this week about Apple’s new music service, Pandora stock took a sharp decline. According to the LA Times, Pandora’s CFO, Mike Herring, downplayed the long term impact that Apple’s new service will have on the product, saying that the same slump occurred when Google launched their “All Access” service which they bounced back from.

The other music streaming model available to consumers, adopted by Google All Access and Spotify, is an ad-free subscription service where consumers pay a flat fee to listen to music of their choosing. If iRadio is launched worldwide there will less initial competition as Pandora and Spotify are currently only available in select countries.

The audio ads will require professional voice talent to help fill the gap between songs which could bring more business to the voice-over industry. It has not yet been determined who will provide the source of talent.

Are you looking forward to what iRadio could bring to the table?

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