As Apple prepares iTunes Radio for a September launch, with
top brands such as Pepsi, McDonald's and Nissan as advertisers, the
long-suffering record industry is hoping for a new kind of boom according to
Rolling Stone magazine.
Competition for streaming-music customers is intensifying —
Pandora announced last week it would no longer cap mobile listener hours as of
September 1st, and Beats by Dre's Daisy service could arrive as soon as
October. All of these developments are likely to hasten the industry's
transformation from selling downloads to streaming songs.
"An arms race is afoot," says Tom Corson,
president and chief operating officer of RCA Records, home of Justin
Timberlake, Ke$ha and Pink, referring to the growth of music-streaming services
from YouTube to Spotify.
"Apple had a very nice business selling things, and it
worked great for us, and it was growing and growing. [Apple] was waiting for a
disruption to come into the market, and now they're prepared and ready to
pounce."
"The 'Buy' button on Apple Radio is very prominent, so
when you hear something and you like it, boom, you press the button," says
Jim Urie, president of distribution for Universal Music, the world's biggest
record label.
Many at record labels view streaming, if not as the future
of the entire business, then an important revenue boost after a long period of
slumping sales. Download sales have dropped in 2013 after years of growth —
about 6 percent for albums and 3 percent for tracks, according to Nielsen
SoundScan. Many experts say the proliferation of free streaming services allow
consumers to spend money on music without buying it.
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