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Apple Secures Warner Music Group Rights for Streaming Music Service

Catalog to be included in a yet-to-launch iTunes extension

Green Day, Bruno Mars, Death Cab for Cutie.
Chelsea Lauren/WireImage; Ollie Millington/Redferns via Getty Images; Tim Mosenfelder/Getty Images
June 5, 2013 2:20 PM ET

On Sunday, Apple and the Warner Music Group reached a licensing agreement to stream the entire Warner catalog on a yet-to-launch iTunes extension, unofficially dubbed "iRadio." Artists signed to record labels affiliated with Warner include Green Day (Reprise), Bruno Mars (Atlantic) and Death Cab for Cutie (Atlantic).

According to The Wall Street Journal, Apple is ready to give Warner 10 percent of all ad revenue – twice that offered to Warner by competing service Pandora Internet Radio.

Apple has already signed a similar deal with the Universal Music Group, whose catalogue includes Maroon 5, Drake and Florence and the Machine. Negotiations with Sony Music (whose lineup boasts Daft Punk, Jack White and John Mayer) have not been successful.

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"Music rental" is now one of the hottest digital trends, and Apple is trying to catch up to several companies that have already taken the lead.

Popular services like Pandora, Spotify and Rdio continue to attract a growing fanbase, while larger players, including Google and Microsoft, have already unveiled their own subscription-based streaming services. Amazon is reportedly conducting its own set of negotiations with record labels as well.

Despite creating two music industry game changers with iTunes and the iPod, Apple held off in venturing into streaming. "The subscription model has failed so far," former CEO Steve Jobs told Reuters in 2007. "People want to own their music."

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Jobs may have been onto something: while services continue to grow in popularity, financial margins are relatively non-existent: Pandora, even with its 200 million registered users, has yet to make a profit, and in 2011, Spotify reported a net loss of $57 million.

"At some point, one of these companies is going to nail it," tech analyst James McQuivey recently told Mashable. "When that happens, Apple will kick itself for not getting ahead of that."

iRadio is expected to be unveiled next Monday during Apple's annual Worldwide Developer Conference (WWDC) in San Francisco.

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