The Wall Street Journal today revealed the specific nature of the deal Apple has struck with the various recording companies in creating iTunes Radio, a feature that will ship with iOS 7 and an upcoming version of iTunes.
During iTunes Radio’s first year, Apple will pay a label 0.13 cents each time a song is played, as well as 15% of net advertising revenue, proportionate to a given label’s share of the music played on iTunes. In the second year, that bumps up to 0.14 cents per listen, plus 19% of ad revenue.
The deal seems to be slightly more favorable to the recording companies than what we have previously seen with services such as this. Hopefully this increased revenue will also make its way to the actual artists — streaming services have historically produced very little income for artists.
Interestingly, the agreement mentions that Apple does not have to pay royalties for music found in talk radio — talk radio isn’t yet available through iTunes Radio, so this could be a hint that Apple is looking to bring that type of content to iTunes Radio at some point.