Report: iTunes Radio Could Be The Start of Something Really Big

From Paul Sloan at CNET.com 

For all the attention given to streaming music, which now makes up the fastest-growing segment of the recorded-music industry, much of the world is still listening to AM/FM radio. Which is why radio in the U.S. captured the bulk of the roughly $14.8 billion advertisers spent in 2012. At the same time, though, more and more radio fans are listening online, either by streaming AM/FM stations or by tuning into pure digital radio plays like Pandora. 

While the shift to digital radio -- whether that's delivered up by algorithms or, as is the case with Pandora and Apple, by a mix of human selection and machine -- is growing fast, it's still in the early stages. Pandora, with its huge audience, says it has 7.33 percent of the total U.S. radio listening audience. That means plenty of people have yet to migrate to the Pandora camp -- and those are people Apple is going after as well. 

But here's Pandora's big challenge. It's not a global service. Far from it. It has rights to music in the U.S. and, more recently, Australia and New Zealand. Unlike Apple, which struck deals directly with the labels and publishers, Pandora goes through rights organizations in each country, so adding markets is challenging, time-consuming, and costly. 

"It is our sincere hope to someday be able to offer Pandora globally," says Pandora spokeswoman Amanda Livingood. "Our posture with respect to further international expansion is best described as 'patiently opportunistic.'" 

So while all the talk about how iTunes Radio is so much like Pandora is fair for now, Pandora is also way too U.S.-centric for Apple's global ambitions. When Apple rolls out iTunes Radio this fall, it will be available only in the U.S., but Cue said Apple will add other countries over time. Those, according to music industry insiders, include the U.K, France, Germany, and Japan, but the service could be big very quickly. The agreements Apple has with the music labels and publishers generally give it rights to the countries where iTunes operates, which is now in 119 territories.

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