How can iTunes Radio break even?

[Silvereel]

Maybe it's just me, but I'm hearing next to no ads on iTunes Radio. What I do hear is usually either for iTunes Festival or something on iTunes. I've probably heard about 5 actual ads, all for Macy's.

Don't get me wrong, I'll take this over Pandora any day. But if Apple's licensing agreement is anything like theirs, I don't understand how they can keep from losing a lot of money on this...

 

[GenesisST]

Maybe it's just me, but I'm hearing next to no ads on iTunes Radio. What I do hear is usually either for iTunes Festival or something on iTunes. I've probably heard about 5 actual ads, all for Macy's.

Don't get me wrong, I'll take this over Pandora any day. But if Apple's licensing agreement is anything like theirs, I don't understand how they can keep from losing a lot of money on this...

Do you have iTunes Match? If so, then you have no ads and therefore your 25$ per year goes into the pool.

If not, then I'm pretty sure that will be fix before long.

 

[Altis]

Could be that they want to hook users to it first, then once they've crushed the competition, start introducing more ads.

It's likely that their contracts have a warm-up period, kind of like getting 6 months of free service in a multi-year plan.

 

[Jessica Lares]

Pandora will mix you in with car insurance, Rosetta Stone, and all that other junk. Apple probably made a deal where they wouldn't do that if the advertisers agreed to pay more, thus giving the ads a better chance to get noticed by listeners.

 

[Alrescha]

I'm pretty sure that Apple doesn't intend on losing money with iTunes Radio, but unlike Pandora they probably don't care about making a lot either. iTunes Radio is very likely just another enhancement to the Apple ecosystem - like the iTunes store* - which exists to keep customers happy (and buying more Apple gear).

A.


* until about 2012, the iTunes store ran just a bit over break-even, according to Tim Cook.

 

[SluGuru]

Do not forget that you can buy songs directly inside of iTunes Radio. With as deep of information they have gathered over the years with Genius I would expect to see a big bump in the sales of singles because of the service.

 

[boltjames]

Maybe it's just me, but I'm hearing next to no ads on iTunes Radio. What I do hear is usually either for iTunes Festival or something on iTunes. I've probably heard about 5 actual ads, all for Macy's.

Don't get me wrong, I'll take this over Pandora any day. But if Apple's licensing agreement is anything like theirs, I don't understand how they can keep from losing a lot of money on this...

Apple isn't doing iTunes Radio to make money. It's a defensive move to cut Pandora off at the knees before it seriously impacts the iTunes Music Store, and it's the Music Store that's the cash cow at Apple.

And if there's a secondary reason for iTunes Radio it's because it's a great way to expose more people to more music and thus sell more music at the iTunes Music Store.

And if there's a third reason for iTunes Radio it's because Apple is trying to be the Android of the Automobile industry (iOS In The Car) and having a streaming radio service to take on Sirius XM is a nice deal-sealer.

BJ

 

[Jazwire]

Apple isn't doing iTunes Radio to make money. It's a defensive move to cut Pandora off at the knees before it seriously impacts the iTunes Music Store, and it's the Music Store that's the cash cow at Apple.

And if there's a secondary reason for iTunes Radio it's because it's a great way to expose more people to more music and thus sell more music at the iTunes Music Store.

And if there's a third reason for iTunes Radio it's because Apple is trying to be the Android of the Automobile industry (iOS In The Car) and having a streaming radio service to take on Sirius XM is a nice deal-sealer.

BJ

This, and the fact that Apple has a mountain of cash, they aren't worried about making a profit on iRadio in the short term.

The goal realistically is to kill Pandora, once that is accomplished things will change. But until then enjoy....

 

[DipDog3]

Maybe it's just me, but I'm hearing next to no ads on iTunes Radio. What I do hear is usually either for iTunes Festival or something on iTunes. I've probably heard about 5 actual ads, all for Macy's.

My experience is the complete opposite. I am hearing ads after almost every song. It is quite annoying.

 

[tonyr6]

Also the ads are starting to get more annoying like FM radio. I know I can pay for iTunes Match but then it erases all of my music off my iPod Touch if I turn it on. If it is off you still get ads which is why I cancelled iTunes Match after only a hour.

Back to Slacker Radio Plus which also includes AOL Radio Plus. Surprised that no one mentions this. It is either Pandora this, Spotify that and Pandora this again.