Why Apple chose iTunes Radio instead of a catalog streaming service

Apple didn't give it much time during the WWDC keynote, but Apple's iTunes Radio service is a pretty big deal. Here's why Apple decided to use the radio station model (ala Pandora) instead of the catalog model (ala Spotify).
Written by Jason D. O'Grady, Contributor
Thoughts on iTunes Radio - Jason O'Grady

At WWDC this week Apple announced its rumored "iRadio" streaming music service. The service, dubbed iTunes Radio allows users to stream music using a radio station model via the Music app built into iOS. The tagline is that iTunes Radio "builds and brings together stations that you'll love from day one."

The most obvious comparison is to Pandora which launched its streaming radio service in 2008 and currently has over 70 million active monthly listeners. The free version of Pandora is ad-supported and includes ads in the form of music interruptions, skins, and popup ads below the album artwork. Pandora free is limited to 40-hours of listening per month and twelve skips every 24 hours (touching "thumbs down" or "don't play for a month" count as "skips"). Pandora One, the company's premium service, costs $36 per year (or $3.99 per month) and is limited to six skips per hour.

Donald Bell wrote a nice piece comparing iTunes Radio and Pandora for CNET.

iTunes Radio is also free in ad-supported mode, but offers a premium version (without ads) to subscribers of its $25 per year iTunes Match service. (The beta version of iTunes Radio distributed to developers plays ads even if you're a Match subscriber, but that will be fixed when the service is released.) iTunes Radio will be available on iOS, Apple TV, OS X and Windows in the United States when it ships in the fall.

I'm disappointed that iTunes Radio is only available using the "radio station" model where you pick an artist, track or genre and it builds a radio station around it. iTunes Radio, like other "radio" services, allows you to tweak what songs are played by touching Play More Like This, Never Play This Song or Skip. You can also control the balance between playing the hits and discovering new songs, but that's about it. Radio services don't allow you to play specific tracks, artists, or albums in a specific order. 

Streaming services like Spotify, Rdio and Mog use a "catalog" music streaming model that allows you to listen to any of the tracks in their 16-20 million track catalogs, on demand, with a paid monthly subscription of around $10 per month. Some catalog streamers (like Spotify and Google Play Music All Access) are hybrid services that also offer a curated "radio station" option.

Apple most likely chose the radio station model because:

1. It's less like to canibalize its iTunes music sales. A buy button is prominently displayed in the upper-right hand corner of the iTunes Radio now playing screen putting you just a touch away from being able to purchase a track. 

2. It was a much easier sell to the music labels. I'm sure that the buy button in the upper-right corner was a significant part of Apple pitch to labels. 

3. It was easier to close deals with three major music labels (which came down to the wire) as opposed to getting deals with all of the labels representing the 26 million plus tracks in the iTunes Store's massive music libary.

Personally, I'd rather have a "catalog" (or hybrid) music streaming service from Apple (imagine, every track in the iTunes store being free to listen to!) over a "radio" service, which is why I don't see canceling my Spotify subscription any time soon. Ever since I've bought into the catalog streaming model, I've purchased very few individual tracks (although I've still purchased a few pre-release albums and live recordings) -- which is probably the exact reason why Apple (and the labels) opted for iTunes Radio on Monday. I hope that Apple eventually expands it's music subscription offering, but judging by how long it took it to secure deals with three music labels (iRadio has been rumored since September) I'm not optimistic.

How do you consume music these days? What music services (if any) do you subscribe to?

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