Apple's Next Target: Internet Radio

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With their television plans basically down the drain, Apple has started special negotiations with record companies to start a new online radio service that's designed to rival Pandora, the best service available right now. 

The Wall Street Journal's Ethan Smith and Jessica E. Vascellaro are already being comparing the service to Pandora, and not just because it's online radio:

Such services create virtual "stations" that play music similar to a song or artist of the user's choosing, either on Web browsers or smartphone apps. Like traditional radio, they are typically free for users, but incorporate advertisements.

That's exactly like Pandora, actually. What's their angle? Well for starters, Apple's negotiating directly with record labels in an attempt to cut special deals to lower the cost of royalty fees. Pandora pays record labels based on levels set by an arm of the federal government. But Apple's going directly to the source and negotiating for lower rates. That's their angle. Getting a cheaper price while Pandora tries to keep up. Meanwhile, Pandora's never posted a profit.

What Apple could offer record labels, besides piles of cash, is unclear. If they succeed, one of the expected outcomes is they will let you hear certain songs multiple times a day. It should be noted that Pandora has never seen green on its fiscal books. But don't get your hopes up for an announcement next week. They just started negotiations recently, so a deal won't get done for another few months. 

The juiciest part of the report, though, is how catty Apple's becoming. The new service won't be available on any Android or Google phone, and it will only "possibly" work on Windows computers. It will definitely work on every Apple product, but that's it.

This article is from the archive of our partner The Wire.